Situation Awareness: Cautious. The tape enters the final session of a holiday-shortened week in hesitation mode ahead of the 8:30 ET June Employment Situation Report, with equity futures mixed — S&P +5 @ 7,548 and Dow +101 @ 52,769 pointing higher while Nasdaq futures sag -33 @ 30,061 as semiconductors buckle again after South Korea’s Kospi cratered -7.9% overnight on Samsung and SK Hynix. SPY/QQQ/IWM cash levels are data-unavailable this morning, so lean on the futures and breadth for structure. Trade mode: selective and defensive into the print, then let the number set the tone — early Treasury close at 14:00 ET and Friday’s full holiday closure will thin liquidity and amplify any post-data move. The dominant force is macro: the payrolls read (consensus 110K, prior 172K) collides with a market still digesting a monster Q2 and a fresh gross-margin scare. Regime context — 64.56% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 348 bulls vs. 214 bears. The 5-day trend is constructive but cooling: buy-the-dip lifted mega-caps into midweek before the semi rally reversed hard on 7/1, and the % above 20-SMA collapsed from 122% to 102%, signaling near-term momentum is bleeding out even as the broader base holds.
SIP: NKE AMPL SOC MSM
- What’s working: the Continuation/2LYNCH scan is rich at 32 signals — healthy breadth for a pre-holiday tape. Reversal scan is thin (2: C, BTDR) and Delayed 9M is empty.
- Leading sectors: live daily performance is offline (market closed) and Sector Volatility ATR is empty; signal-flow skews MEDICAL (IBRX, TEM, IRTC, KMTS) and SOFTWARE (KVYO, NAVN) as the active pockets.
- Key event: June Nonfarm Payrolls at 8:30 ET is the week’s marquee catalyst — a soft print greenlights the buy-the-dip crowd, a hot one reprices the front end.
- Market read: 7/1 was a rotation, not a rout — S&P -0.2%, Nasdaq -0.7%, PHLX Semi -6.3% but software (IGV +3.0%), Meta +8.8% and Apple +1.7% cushioned the blow. Chips staying weak into today keeps the Nasdaq heavy.
- DEP watchlist: no Delayed 9M signals today — nothing qualifying.
- SIPS: GRND (+9.2%, RVOL 2.4), TEM (+6.3%), KVYO (+8.3%) lead the swing candidates from the Continuation scan.
Today’s Market Narrative
Markets are holding their breath. Futures point to a mostly higher open — S&P +5, Dow +101 — but the Nasdaq is dragging -33 as the semiconductor complex takes a third body blow. Overnight, South Korea’s Kospi collapsed -7.9% and Japan’s Nikkei shed -2.5% on heavy selling in Samsung and SK Hynix, and that memory-name weakness is bleeding straight into the U.S. premarket. This is the same fault line that fractured Wednesday’s tape, when the PHLX Semiconductor Index dropped -6.3% with Corning (GLW -13.6%) and KLA (KLAC -11.8%) among the S&P’s worst. The encouraging tell: the broader index barely flinched. Software (IGV +3.0%), Meta (+8.8% on its AI-cloud build-out), Apple (+1.7%) and Microsoft (+3.0%) absorbed the hit — evidence that money is rotating within tech, not fleeing it.
The overriding story, though, is the 8:30 ET June jobs report. Consensus sits at 110K headline (prior 172K), 88K private, unemployment steady at 4.3%, and average hourly earnings +0.3%. Wednesday’s ADP print of 98K private jobs — service-led, small-business-driven — set a soft-ish table. With the Treasury market closing early at 14:00 ET and everything shuttered Friday for Independence Day, expect the reaction to front-load into the morning before liquidity evaporates. That’s the setup for an outsized knee-jerk on any surprise, followed by a drift.
Zoom out and the backdrop is still constructive. The major averages are on pace for solid weekly gains across the board, capping a Q2 that delivered an 88% rip in the Philadelphia Semiconductor Index, +27.5% for the Nasdaq 100, +21% for the Russell 2000 and +15% for the S&P 500. Crude oil is grinding toward its fourth consecutive weekly decline — WTI down near $67.11, off -2% on the session — as oil keeps flowing through the Strait of Hormuz at roughly 10 million barrels a day, defusing the geopolitical premium. Cheaper energy is a quiet tailwind for consumer sentiment and margins.
But breadth is the yellow flag. The percentage of stocks above their 20-day SMA cratered from 122% to 102% day-over-day, and the 40-SMA reading slipped to 64.56% from 65.21% — just below the bullish threshold. Participation is narrowing at the margin even as the index holds. That’s the definition of a cautious tape: broad enough to buy, thin enough to respect.
Macro & Policy
The bond market is inching lower again. The 10-year yield sits at 4.49% (down 4/32 in price), having sneakily climbed back to the 4.50% zone this week even as oil tumbled — a curious divergence that says the move is about Fed positioning, not inflation fear. The curve is a touch higher across the board: 2-yr +1bp to 4.17%, 5-yr +2bps to 4.25%, 30-yr +1bp to 4.98%. The U.S. Dollar Index is soft, down 0.3% at 101.07, with EUR/USD +0.2% at 1.1405 and USD/JPY -0.7% at 161.47 as Japanese officials weigh abandoning their practice of pre-signaling FX interventions.
On policy, Fed Chair Warsh’s ECB forum appearance passed without fireworks — he reiterated he wants markets weaned off constant Fed guidance and acknowledged that while inflation remains elevated, upside risks have diminished. Notably, the market now reads the Fed, Bank of England and ECB as collectively pulling back from forward guidance, which raises the premium on hard data like today’s payrolls. Eurozone unemployment held at 6.2% (better than the 6.3% expected), Swiss CPI came in soft, and European indices are broadly green — DAX +0.8%, CAC +0.9%, FTSE MIB +1.2%.
The macro wildcard remains gross margins. Briefing’s Big Picture flags that Apple and Microsoft price hikes — driven by memory and storage costs up more than 2.5x with another doubling expected by fall 2027 — are an early warning that margin pressure is spreading. Gross margins are the leading indicator for operating leverage and earnings. If Q2 guidance reveals companies can’t offset rising COGS, the market’s rich earnings optimism gets tested. Watch it: Apple is even lobbying Washington to buy Chinese memory chips to ease the crunch.
Economic Calendar Today
- 8:30 ET — June Nonfarm Payrolls: Expected 110K | Prior 172K. Private 88K | prior 120K. The main event; sets rate expectations into a thin holiday tape.
- 8:30 ET — Unemployment Rate: Expected 4.3% | Prior 4.3%. Average Hourly Earnings +0.3% expected; a hot wage number would sting the front end.
- 8:30 ET — Weekly Initial Claims: Expected 220K | Prior 215K. Continuing claims prior 1.821 mln.
- 10:00 ET — May Factory Orders: Expected +1.5% | Prior +4.8%.
- 10:30 ET — Weekly Nat Gas Inventories: Prior +76 bcf.
- 14:00 ET — Treasury market early close; Friday July 3 full market holiday. Liquidity thins fast after midday.
- Earnings: Lindsay (LNN) beat by $0.39 and topped on revenue this morning; no notable afternoon reports.
Earnings & Corporate News
Nike (NKE 43.06, +4.90%) is the standout carryover — its better-than-feared quarter, with EPS up a stunning 404% year-over-year, reinforced the turnaround thesis and kept discretionary bid despite cautious management guidance. It gapped +0.9% and ran +4.16% off the open, our top SIP name. FactSet (FDS +6.72%) and General Mills (GIS +8.53%) both beat and rallied, while MSC Industrial (MSM +6%) punched a new all-time high on strong Q3 results — a genuine tell that the manufacturing recovery is gaining traction, with pricing actions adding ~6.5% to daily sales. On the flip side, Constellation Brands (STZ -1.59%) beat but sold off on soft beer depletions, and Walmart (WMT -3.92%) stayed pressured on a Cleveland Research note warning of slowing comps and excess inventory.
Analyst desks are active: Palantir (PLTR) upgraded to Buy at DA Davidson (tgt $175) after already surging +7.77% on Trump’s disclosed share purchase; Chevron (CVX) to Outperform at Wolfe (tgt $210); Adobe (ADBE) to Buy at HSBC (tgt $308). Greenbrier (GBX) reported in-line EPS, missed revenue, cut FY26 guidance and got downgraded — it’s gapping -1.8%.
Corporate headlines carry weight: OpenAI reportedly discussed handing the U.S. government a 5% stake, the EU Court upheld Alphabet’s (GOOG 354.39, -1.0%) €4.1 billion fine, and Vertex (VRTX) won FDA approval to expand CASGEVY to children ages 2+. In premarket movers, FIZZ +7.6% and HCM +5.1% lead the gainers; ELTX -22.4% and FC -21.2% anchor the losers after a dilutive offering and weak results respectively.
WaveFinder Signal Summary
Scan environment is healthy but not euphoric. The Continuation/2LYNCH scan fired 32 signals — solid breadth for a pre-holiday session — clustered in MEDICAL and SOFTWARE. The standouts: GRND (+9.2%, RVOL 2.4) leads on both momentum and volume confirmation; TEM (+6.3%, ATR 3.5) and KVYO (+8.3%) round out the software/med theme. IBRX (+5.1%) and IRTC (+4.7%) carry the medical flag. The Reversal scan is nearly empty (C, BTDR) and Delayed 9M produced nothing — so there’s no counter-trend edge and no episodic-pivot depth today.
Breadth is the caution. Stocks above the 40-SMA slipped to 64.56% from 65.21%, and the 20-SMA gauge tumbled 20 points to 102% — a sharp near-term contraction that argues for tighter risk and letting the payrolls print clear before pressing size.
Today’s Watchlist
- NKE — Q4 blowout (+404% EPS), ran +4.16% off the open; watch for follow-through above $43 as the turnaround narrative firms.
- GRND — Strongest Continuation/2LYNCH setup, +9.2% at $15.69 on RVOL 2.4; internet momentum leader.
- MSM — New all-time high on Q3 beat; a clean manufacturing-recovery proxy, +6% with pricing leverage intact.
- PLTR — DA Davidson Buy upgrade (tgt $175) stacking on a +7.77% surge; momentum name to watch if broad tape holds.
- SOC — SIP name, +12.85% off open on an offering, RVOL 10.15; high-energy but high-short-float (19.7%) — respect the volatility.
- TEM — Medical Continuation signal, +6.3% at $61.60; swing candidate if breadth stabilizes post-data.
Action Codes of the Day
- CRT (Controlled Risk Taking) — With breadth cooling (20-SMA 102% from 122%) and payrolls looming into a thin holiday tape, calculated risk within the system beats forcing size; 40-SMA at 64.56% is constructive but fragile.
- FHP (First Hour Pass) — The 8:30 ET jobs print and semiconductor weakness (Kospi -7.9%) demand you let the open show its hand before committing; let the data-driven volatility resolve before entering.