Situation Awareness: Cautious. After a bruising week that dragged the S&P 500 down 1.9% and the Nasdaq 2.5%, futures are staging a relief bid — S&P futures sit 36 points above fair value and Nasdaq futures +235, led by an extending crypto rally (Bitcoin +5% toward $77,000). Index cash levels are (data unavailable) this morning, so lean on breadth and futures for the read. The tape’s twin antagonists all week — rising Treasury yields and a nearly 3% oil spike on Iran tensions — are stable but not resolved, keeping this a bounce-inside-a-downtrend setup. Trade mode: selective and defensive, respect the relief but don’t chase into an unconfirmed reversal. Today’s swing factor is the 9:45 ET U.S. flash PMI print and any fresh Iran headlines. Regime context — 52.92% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 107 bulls vs. 247 bears, a decisively negative skew. The 5-day trend shows breadth eroding hard (40-SMA 52.92% vs 57.64%, 20-SMA 53% vs 60%), confirming this week was a genuine distribution sequence, not noise.
SIP: ANDG GEMI AVX CMRC
- What’s working: thin. Continuation/2LYNCH fired only 6 names, Reversal 12, and Delayed 9M is empty — a dry scan environment that argues for patience over aggression.
- Leading sectors: market closed — no live sector or theme performance data; ATR volatility table empty. Directional read must come from the macro tape, where energy and crypto-linked names carry the momentum.
- Key event: 9:45 ET U.S. flash S&P Global Manufacturing (prior 53.9) and Services (prior 54.6) PMIs — the only U.S. data all day and the session’s primary swing catalyst.
- Market read: yesterday closed at session lows with every major index down 1%+ on a rates-plus-oil squeeze; today’s gap-up is a mean-reversion attempt that must prove itself against 247 four-percent decliners.
- DEP watchlist: no Delayed 9M signals today — nothing qualifies.
- SIPS: WELL, MSCI, CPAY — lowest-risk continuation names in a defensive tape.
Today’s Market Narrative
The market is, in Briefing’s words, “living to fight another day.” After Thursday’s steady bleed to session lows — S&P 500 -0.9%, Nasdaq -1.0%, Dow -1.3% — buyers are stepping back in pre-market with S&P futures 36 points above fair value and Nasdaq futures a robust +235. The proximate driver is a second day of crypto euphoria: Coinbase (COIN 179.99, +4.4%) and Robinhood (HOOD 96.61, +4.7%) are extending Wednesday’s surge after President Trump’s push to pass the CLARITY Act lit a fire under crypto-linked equities, with Bitcoin tacking on another 5% toward $77,000. That risk-on impulse is bleeding into the broader growth complex.
But context matters: this is a bounce inside a down week. Entering today the S&P is -1.9% and the Nasdaq -2.5% week-to-date, and every index carries losses of 1.8% or wider. Thursday’s damage came from a reversal of Wednesday’s rate-relief trade — the Treasury’s expanded buyback program had pushed yields down and lifted equities midweek, but rates snapped back higher and unwound that relief. Layer on a 2.9% oil spike after Trump threatened fresh economic measures against Iran, and you had consumer discretionary (-1.8%), consumer staples (-1.9%), and health care (-1.9%) all getting hit hard.
The one pocket of resilience was semiconductors — the PHLX Semiconductor Index gained 0.5% Thursday even as the broad tape sank, and memory names rebounded from two ugly sessions. That divergence matters: with the info-tech sector now 37.9% of the S&P 500, chip stability is doing outsized work to keep the index from breaking. If today’s PMI cooperates and yields stay pinned, the semis-plus-crypto combination gives bulls a credible path to narrow the week’s losses.
Overnight was constructive but quiet. Asia finished the week mostly higher (Hang Seng +1.2%, Kospi +0.9%) and Europe was flat-to-firm. The real signal came from flash PMIs: Japan’s manufacturing hit 55.1 — its eighth straight month of expansion — and the eurozone printed 52.8, its fastest pace in over four years. Global growth data is quietly firming, which supports risk appetite even as it complicates the disinflation-and-rate-cut narrative.
Macro & Policy
Treasuries are the whole story this week, and they’re stabilizing this morning after Thursday’s selloff. The curve shows shorter tenors firmer and the long bond lagging: 2-year at 4.18% (-1 bp), 5-year 4.38% (-1 bp), 10-year 4.69% (-1 bp), and the 30-year at 5.25% (+1 bp). Zoom out and the week’s volatility has been largely a round trip — the 30-year yield is down two basis points on the week and the 10-year down one basis point from last Friday, despite the intraday drama.
The overhang is the Treasury’s liquidity management. Wednesday’s announced increase to its longer-dated buyback allowance sparked a rally; Thursday, the long bond gave most of it back. Secretary Bessent told CNBC his office has “multiple tools” for potential liquidity issues, but the market remains firmly in “show me” mode. Watch the long end — a persistently underperforming 30-year is the tell that the buyback program isn’t calming the term premium.
Geopolitics is the wildcard. Crude hovers near $86.61/bbl after settling at $88.15 Thursday, and Iran threatened a “devastating response” to pledged U.S. sanctions. Bessent has teased a Monday press conference on what he called potentially the “greatest coordinated economic isolation in the history of the world,” while VP Vance framed the pressure campaign as a “delicate dance.” Any escalation reignites the oil-and-defense trade that hammered airlines and lifted crude this week. Elsewhere, gold is ripping +1.9% to $4,657 and copper +2.3% — classic hedging and reflation signals. The dollar index is soft at 98.68 (-0.2%).
Economic Calendar Today
- 9:45 ET — Flash S&P Global U.S. Manufacturing PMI — Prior: 53.9. A firm print echoes the strong global PMI batch and supports growth-sensitive cyclicals; a miss revives soft-landing doubts.
- 9:45 ET — Flash S&P Global U.S. Services PMI — Prior: 54.6. The more important of the pair for a consumption-driven economy; watch price sub-indices for inflation read-through into rates.
- These are the sole U.S. releases today — a light slate means the PMIs and Iran headlines dominate. Thin calendars into a Friday can amplify moves if positioning is stretched after a down week.
- No scheduled Fed speakers or major Treasury auctions on the docket; the next Iran catalyst is Bessent’s Monday press conference.
Earnings & Corporate News
Retail earnings were the wrecking ball this week. Walmart (WMT 103.84, -9.15%) beat on Q2 EPS and grew revenue 5.9% to $187.9 bln, but its third straight quarter of downside Q3 EPS guidance ($0.62-0.64) and softer U.S. comps (+2.6% vs. +4.1% in Q1) crushed the stock — with a 125-bp pharmacy-deflation headwind and rising fuel prices pressuring the consumer. Advance Auto (AAP 42.39, -24.55%) was even uglier, collapsing after DIY demand cratered late in Q2, with the headline EPS beat flattered by a $0.31 tariff-refund benefit.
The bright spot was Ross Stores (ROST 247.25, +8.0% pre-market), a clean beat-and-raise: EPS topped by $0.71, comps up 10%, and above-consensus guidance for Q3, Q4 and FY27. The bifurcation is telling — off-price winning while conventional retail struggles with a budget-stretched consumer. Deere (DE +6.94%) and Nordson (NDSN +8.00%) also delivered post-earnings strength within a beaten-down industrials sector.
On the mega-cap front, Broadcom (AVGO 368.90, +1.3%) is seeking more than $60 billion in funding for an AI chip financing deal per Bloomberg — a reminder the AI capex flywheel keeps spinning even amid bubble chatter. And Trump announced a ground-beef import deal allowing up to 300,000 metric tons tariff-free over 90 days, a modest disinflationary gesture for the food-cost narrative.
WaveFinder Signal Summary
The scan environment is dry, consistent with a distribution week. Continuation/2LYNCH produced just 6 signals and Delayed 9M is empty — when breakout scans thin out like this, it’s a breadth warning, not a green light. The Reversal scan is busier at 12 names (ORLY, NBIS, RDDT, ASTS, INTC), which fits a market chopping at the lows rather than trending. The cleanest continuation setups are the low-risk defensives: WELL ($237.40, 46.1% risk) in real estate, MSCI ($568.75, 45.0% risk) and CPAY ($412.00) in financials.
Breadth is the headline concern. Stocks above the 40-day SMA slipped to 52.92% from 57.64%, and above the 20-day to 53% from 60% — a 7-point one-day drop. With 247 four-percent decliners against just 107 advancers, internals are deteriorating faster than the index prints suggest. Today’s gap-up needs breadth to expand to be believed; until then, treat rallies as tactical.
Today’s Watchlist
- COIN — 179.99, +4.4% pre-market; crypto-policy momentum with Bitcoin toward $77K, but volatile — size accordingly.
- ROST — 247.25, +8%; beat-and-raise off-price winner bucking the retail carnage, watch for follow-through.
- WMT — 103.84 after -9%; oversold bounce candidate but guidance overhang caps upside; a barometer for the consumer.
- WELL — 237.40, 2LYNCH continuation; low-risk defensive real-estate name that works if the bounce stalls.
- MSCI — 568.75, 2LYNCH; 45% risk financial with steady character in a choppy tape.
- INTC — 92.13, Reversal signal; ride the semiconductor resilience that held up Thursday.
Action Codes of the Day
- CRT (Controlled Risk Taking) — With 52.92% above the 40-SMA and 247 vs. 107 on the 4% gauge, this is a choppy, two-sided tape; take calculated risks on the lowest-risk setups (WELL 46.1%, MSCI 45.0%) only.
- FHP (First Hour Pass) — The 9:45 ET PMIs land right after the open into a gap-up on a down week; let the market show its hand before committing size.