After-Hours % Gainers

After-Hours % Decliners

Position: None

Volume and VIX

– NYSE volume 15% below its one-month average

– NASDAQ volume 33% below its one-month average 

– VIX index: up 14.17% to 17.16

Closing Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

Closing S&P 500 Heat Map

Position: None

Sorted by $ Market Cap

Dougie, Not often I feel I can point out something to you about markets’ structure that I did NOT see in your email re SKHynix posted on X last week:

At this moment, SKHYNIX ADRs are trading at $168 or $1680 per full SKHynix share. On http://trade.xyz, that same share is trading at $1281, a $400/share discount – the most likely reason being heavy selling by Wall St pros and their best clients who bought before IPO hype. Don’t be a sap SKHY.

The amount of the “gap” between insiders and the public could not have been more clearly visible with the “real” SKHynix market nearly 25% below the ADR hyped AND manipulated (legally as IPO market stabilization to facilitate exit of the guys who make a living off FIFO in domestic IPO markets…they trade at the sucker IPO price but sell to the “stabilized price” profitably.) one. NOT to mention the underwriters shorting in the immediate aftermarket to more suckers…. there ought to be a Netflix series on this …        

Position: None

ajfox777

I enjoy Doug’s diary and the comments. This is the first time posting for me.

The SPCX prospectus addresses the risk of a satellite to satellite collision and the ramifications but it does not appear to address another significant risk of micro-collisions. With the future value of SPCX tied to hundreds of thousands of satellites with large solar arrays put into low earth orbit it appears there is a foreseeable risk of micro debris hitting the solar panels producing more micro debris that grows logarithmically threatening all the satellites in low earth orbit (the Kessler affect). This appears to be something that should have been in the prospectus and something that is being ignored by the financial media. I have a few SPCX leap puts.

P.S. Thanks for making your first contribution to the Comments Section Foxy!

Position: Short SPCX (S) 

SpaceX (SPCX) is currently about $2 1/2/share above its IPO price of $135 and it is $75/share lower than where we shorted the name ($213) only a few weeks ago.

Position: Short SPCX (S) 

From Peter Boockvar

Chris Waller gives some forward guidance

Fed Governor Chris Waller is still ok with forward guidance. In a prepared speech just released he said “If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term.” The next meeting is in 2 weeks and is that ‘near term’? Sounds like it. As of this writing, the fed funds futures is now pricing in a 50% chance of a hike in a few weeks.

Treasury yields are at the highs of the day and see below the 2 yr yield response in particular intraday.

2 yr intraday

* Soros voiced the concept of concentration to Druckenmiller 

* Buffett and Munger said it to Berkshire Hathaway investors 

* Mae West told it to men

“Too much of a good thing can be wonderful.”

– Mae West 

I am now at my largest gross long exposure in cannabis as a percentage of the portfolio than at any time in the last decade.

“(I wonder what kind of a woman you are)….Too bad I can’t give out samples.”

Position: Long MSOS (VL) individual companies

SanDisk (SNDK) is part of my high-beta, high-tech short basket.

At $1,714, the shares are now -$640 from their high of $2,354 achieved only three weeks ago.

Position: Short SNDK (VS)

* Risks now dwarfs rewards…

Stated simply, my ursine market view continues to be influenced by:

 • The lack of fiscal discipline in Washington, D.C., which has resulted in ever increasing annual deficits and a burgeoning national debt load.

• Improvisational fiscal and foreign policy could lead to adverse economic and market outcomes.

• The domestic economy and 2026-07 S&P earnings growth are heavily reliant on AI capital spending. 

• We are skeptical whether the AI spend will translate into adequate returns on capital. 

• Persistently high inflation. 

• The likelihood that interest rates will be higher for longer.

• In today’s uneven K-shaped economy, many consumers are spent up and not pent up. 

 • An equity risk premium which has now morphed into an equity risk discount. 

 • Extended valuations in the 95%-tile (Cape Shiller Ratio, Buffett Indicator and other traditional metrics). 

• We are in a Bull Market in Complacency with institutional cash allocations near record lows and the buy the dip mentality (too) firmly entrenched. 

• Market structure risks are expanding materially. With the popularity of leveraged ETFs and ODTE options (zero days till expiration on indexes and, now even on INDIVIDUAL stocks) the markets have become gamified. Investor timeframes have been reduced as they behave more as gamblers in a casino than long term investors.   

Positions: None.

– NYSE volume 17% below its one-month average; 
– Nasdaq volume 46% below its one-month average; 
– VIX index: up 8.45% to 16.30

Positions: None.

Chart from 9:35 a.m. ET

Positions: None.

From Peter Boockvar:

Maybe not yet/The most important IPO this month & it’s not SK Hynix/Oracle/Delta/Very euphoric

There doesn’t seem to be much follow through on that story Friday that the Japanese government was going to direct its pension funds to invest more at home. Reuters today is reporting that Japan has no immediate plans to change target asset allocations of its state pension funds but could work within existing allocation ranges to direct more investment to domestic assets, people with knowledge of government deliberations told Reuters. GPIF is the world’s biggest pension fund with about $1.8 trillion of assets as of March. Currently the fund has allocated about 25% in domestic equities, 25% in foreign equities, 25% in domestic bonds and 25% in foreign bonds.

This said by Reuters, there is leeway around the fixed income allocation so if JGB yields continue to rise, and thus making them more attractive, I’m pretty sure the GPIF and other Japanese domestic funds, will take advantage of that yield opportunity, bring money home and with not having to take FX risk.

After falling by a sharp 13 bps on Friday, the 10 yr JGB yield rebounded by 5 bps. The yen is weaker again and the Nikkei fell 2%, also weighed down in sympathy by the selloff in the Kospi. Keep your eye on this situation in many ways. The impact that the direction of JGB yields has on global rates, the carry trade implications if the yen continues to weaken, along with its inflationary influence and in turn JGB impact. And Japanese stocks have been big winners this year so far.

While the market got very excited about the SK Hynix US listing, I’m much more interested in this week’s CXMT (ChangXin Memory Technologies) listing (I believe on Thursday) in Hong Kong as SK has already been public for years. As I’ve mentioned a few times over the past few weeks this is China’s biggest DRAM producer and the 4th largest in the world. They are looking to raise about $4.3 billion and be sure that they are coming for Micron’s 85% gross margin, along with the earnings that Samsung and SK Hynix produce. Soon after will be a listing of China’s largest storage NAND company, Yangtze Memory Technologies, the 6th largest NAND maker in the world.

Just as China is now competing on the global stage and head-to-head with US AI frontier models, they want to do so on the hardware side as well and as Jeff Bezos once said, your gross margin is their opportunity.

With respect to Q2 US earnings season, a quick mention on Q1. Of the 28% y/o/y earnings growth, about 12 percentage points came from ‘other income’ from the big hyperscalers which happened to be their upside marks on their private equity holdings of SpaceX, Anthropic and OpenAI. About half of the earnings growth balance was from semiconductor companies. Thus, when hearing the headline earnings growth pace for both Q1 and now Q2, it’s important to look under the hood for a breakdown and the contributors.

Speaking of a hyperscaler, I went through the S&P downgrade of Oracle over the weekend to BBB- and these were the key points from them:

“Oracle’s growing AI infrastructure business is diluting its strong business risk profile. We assigned Oracle a negative outlook in July 2025 due to the pace of its AI infrastructure buildout and the potential financial impact. We now recognize that we underestimated the scale of the investments required to expand the AI business and its impact on our overall view of Oracle’s creditworthiness.”

“We project Oracle’s cloud infrastructure business, which accounted for 27% of revenues in fiscal 2026, will make up almost 60% of revenues by fiscal 2028. We view this to be much riskier than its legacy enterprise software and database businesses…This is because of the need for substantial upfront investment while returns are realized over the duration of multi-year contracts.”

“In addition, SpaceX’s recent decision to lease its compute capacity to Anthropic and Alphabet – and the potential for Meta to do the same – portend growing competition within the industry.”

Lastly of note, “OpenAI remains a key credit risk. We estimate that OpenAI makes up roughly half of the $638 billion in RPO (remaining performance obligations). OpenAI’s ability to meet its contractual obligations and raise external financing will be contingent upon AI tailwinds continuing and its models being market leaders. If OpenAI were unable to pay Oracle, we believe Oracle could be left with massive data center leases that it might be unable to exit or have to re-lease to new tenants under less favorable terms.”

I’ll argue again, OpenAI, because of their wide tentacles throughout the GenAI date center eco system, is too big to fail because it would bring down a lot with it.

This was from Delta’s earnings call Friday and whose stock has fallen in 6 out of the last 7 days:

“Our customers are prioritizing experiences and investing in the moments and connections that matter most to them, driving sustained strength and demand for air travel.”

With respect to their Delta/AmEx partnership, “Card spend has grown double-digits for the past 7 quarters with particular strength among our premium reserve cardholders.”

“structural change (in the industry) has accelerated, enabling the industry to recapture this year’s fuel cost inflation at the fastest pace of any recent cycle. Even after recent fare increases, airfares remain 10 points to 15 points below overall inflation since Covid. With continued fuel volatility and much of the industry still earning returns below its cost of capital, we believe current revenue momentum should remain sustainable even if fuel prices moderate.”

“main cabin trends improved through the quarter, with main cabin unit revenue growing mid-teens in the month of June.”

“We need to continue to make certain that we cover our costs, and one of our biggest costs is fuel, which is still up 50%. So I would not anticipate any decline in airfares.”

With respect to stock market sentiment, at least by the Citi Panic/Euphoria index, it is back to the recent highs of Euphoria and as a reminder, .41 is threshold so we are well above it.

Positions: None.

Adding to MSOS (MSOS) $4.48 and MSOX (MSOX) $2.61.

Long MSOX L MSOX S

Upside:

-QTTB +71% (reports Phase 2a SIGNAL-AA Part B results for severe alopecia areata)

-AGEN +47% (prices $85M private placement at $3.69 effective purchase price; discontinues financial support for the ongoing BATTMAN Phase 3 study in late-line metastatic MSS colorectal cancer)

-TCBK +7.1% (acquired by First Hawaiian in all-stock deal; 2.095 shares per TriCo share, representing $63.12/shr)

-BW +4.0% (authorizes $50M share repurchase)

-SHOP +3.3% (Jefferies Raised SHOP to Buy from Hold, price target: $160 from $140)

-CNMD +3.2% (reportedly considers sale following takeover interest)

-MGM +2.4% (reportedly in talks to be acquired by People Inc at $48.30/shr)

-KEYS +2.3% (Morgan Stanley Raised KEYS to Overweight from Equal Weight, price target: $400)

Downside:

-BNZI -23% (prices 327.3K share public offering at $2.75/shr for $0.9M)

-MTNB -21% (enters business combination with GH Power to create publicly traded clean energy company)

-VEEE -11% (enters merger with USFM; Spins off Marine Business to private CVR Trust)

-SKHY -8.0% (profit taking off IPO last week)

-FHB -6.6% (reports prelim earnings)

-SNDK -5.9% (Evercore ISI Institutional Equities Reiterates SNDK with Outperform, price target: $3,100 from $1,400)

-WDC -5.4% (US memory chipmaker weakness)

-MU -5.3% (US memory chipmaker weakness)

-INTC -3.7% (invests €5B to expand manufacturing in Ireland)

-MSTR -3.4% (sells 4.8M MSTR shares for $466.7M net proceeds)

Positions: None.

* And that will be something to see in the QQQs…

QQQs (QQQ) -$8.30 this morning…

“Good…  Until that day accept this gesture as a gift on my daughter’s wedding day.” 

– The Godfather  The Godfather Someday, and that day may never come, I will call upon you to do a service for me.

Buono sera!

Positions: None.

Positions: None.

Treasury Auctions

11:30 a.m. Treasury hosts a $92B 3 and a $79B 6-Month Bill Auction

Fed Speakers

5:25 a.m.: Fed Vice Chair for Supervision Bowman (Voter) speaks on “Modernizing Financial Regulation” before a virtual Bank Policy Institute Roundtable, London (Text available. Q&A from moderator. 

Livestream at https://allenovery.zoom.us/j/86366907911?pwd=MqCuoEmfHQaTZCuYJBt4M2DEE62hWi.1) (Meeting ID: 863 6690 7911, Passcode: 005832); 

12:30 a.m.: Fed Board Governor Waller (Voter) speaks on the economic outlook in conversation before the New York Association for Business Economics, NYC (Livestream at https://onemetlife.webex.com/)

Economic Calendar

Positions: None.

Positions: None.

Disney’s (DIS) shares have sat out the multi-year bull market and we have sat out Disney.

Our analytical criticism is multi faceted:

* Admission prices at the company’s theme parks are absurdly high — a weakening consumer in the K-shaped economy will almost certainly experience demand elasticity (and a reluctance to attend the parks).

* Disney’s movie lineup is dated and continues to demonstrate disappointing box office sales. ‘Moana’ joins ‘Snow White’ as the latest live-action Disney film to bomb at box office | OutKick

* The company’s balance sheet is debt heavy from a slate of poorly conceived acquisitions. At worst, it could inhibit needed capital spending/expansion at parks, et al.

* AI remains a threat to a number of Disney’s businesses.

All this said, there is a price (and favorable reward vs. risk) for everything. I live under $90 for Disney.  

Position: None

“What we have learned from history is that we have not learned from history.”

 –Benjamin Disraeli

And you wonder why I am critical of Fin TV: 

CNBC spent all week waxing enthusiastically about the SK Hynix (SKHYV) Nasdaq listing and little time of analytical substance (that would help their viewers):

SK Hynix rises 13% in Nasdaq debut. Chairman says ‘demand is enormous’

SK Hynix shares fall after stellar Nasdaq debut

The JPMorgan of Crypto

No more vivid example of a softball interview characterized by the absence of ANY critical questions can be seen in CNBC’s Kate Rooney’s smiling and adoring sixty-minute interview with FTX’s Sam Bankman-Fried only a few months before his indictment.  

Listen carefully to the kowtowing:

FTX still has $1 billion to deploy, says CEO Sam Bankman-Fried – YouTube

What a continued injustice to their most important stakeholder… CNBC’s viewers. 

Position: None

I doubled up on my Nvidia (NVDA) put position on Friday.

Position: Long NVDA Puts

I am still short my high-beta, high-tech basket which includes these names (and others): Intel (INTC), Micron (MU), SanDisk (SNDK), Applied Materials (AMAT), Advanced Micro Devices (AMD), Caterpillar (CAT), CoreWeave (CRWV).

Position: Short INTC (S), MU (S), SNDK (S), AMAT (S), AMD (S), CAT (S), CRWV (S).

The S&P Short Range Oscillator barely budged, remaining in an overbought at 2.56% vs. 2.55%.

Position: None 

Dougie Kass

Sunday night trading.

With s and p futures -27 handles and nasdaq -225 handles i covered my index shorts:

• SPY $752.28
• QQQ $720.33

Position: None