Debt Ceiling Woes Aside! It's Party Time! 🥳

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• 💃 Markets dancing again

• 📝 Debt ceiling concerns eased

• 🎙️ Nothing crazy in earnings

🐂 Market Dance – Equities presented a mixed picture: the S&P 500 remained steady, while its equal-weight version fell by 19bp. The Dow Jones experienced a slight dip, losing 50 points, whereas the Nasdaq managed to rally by 41 points. Small caps, as represented by the Russell 2000, fell by 5.7 points. Meanwhile, the China HXC Index took a significant tumble, dropping 297bp.

In the fixed income world, Treasuries experienced a rebound with yields falling between 7 and 13bp across the curve. The market is currently anticipating a year-end Fed Funds Rate of 4.96%, down ~2bp from Friday. Also, the likelihood of a 25bp hike on June 14th is at 68%.

Meanwhile, the dollar index dipped slightly by 15bp. On the commodities front, Brent crude took a hit, down ~415bp due to concerns about demand and Russia's potential quota violations. Gold had a modest uptick, while Bitcoin rose by >$1K from Friday's closing.

🎢 Tues-yay! – As for Tuesday's market activity, it was rather quiet and uneventful, despite a noticeable fade in stocks from the pre-open rally. The market does not appear overly concerned about the debt ceiling deal not passing or its potential impact on growth or liquidity. However, it should be noted that the SPX rally on Thursday and Friday was partly in anticipation of a compromise, which seemed increasingly likely as of Thursday's trading session.

🎤 How we’re thinking about stocks – Looking ahead, we maintain a positive outlook on stocks, primarily driven by robust earnings. While the economy is showing resilience in terms of growth and inflation, we believe the threshold for additional Fed hikes remains high. Our primary macro concern is the potential negative impact of ongoing disinflation on earnings.

However, market sentiment appears to be more pessimistic, and positioning isn't as favorable. Moreover, some investors seem to be chasing the market for less substantial reasons, including celebration of the debt ceiling resolution and AI hype. While there isn't substantial upside potential in the broader market, we believe there are opportunities within non-tech segments, including the equal-weight S&P 500 and the Russell 2000. 📈

🔨 $LL (LL Flooring), the 'hardwood aficionados', got a pickup line worth $5.76/shr from founder Thomas Sullivan. It's like getting back together with an ex, but with more hardwood and less heartbreak.

🎣 $SPWH (Sportsman’s Warehouse), the 'outdoorsy types' of retail, reported Q1 results that were about as pleasant as a rainy camping trip. They posted an EPS loss of $0.39, a tad worse than the Street's bet of a $0.37 loss, and revenue was in line at $267.5M. Looks like not all fishermen's tales end in big catches.

💳 $V (Visa), the 'plastic surgeons' of finance, reported a standard consumer spending update. U.S. payments volume rose 5% Y/Y in April and May. Much like their cardholders, Visa's numbers aren't going anywhere exotic, but they're staying comfortably steady.

🏢 $EQR (Equity Residential), the 'high-rise heavyweights', boosted their annual outlook due to strong demand and less rent dodging in SoCal. They now see normalized FFO of $3.73-3.83 vs. the Street's $3.75. Looks like it's 'high rents, high spirits' for EQR.

📷 $AMBA (Ambarella), the 'image innovators', reported Q1 revenues of $62.1M, down 31% and roughly in line with expectations. The picture might be a little grainy, but at least it's not entirely out of focus.

☁️ $BOX (Box Inc.), the 'cloud custodians', posted solid Q1 results with a $0.32 EPS (vs. the Street's $0.27) and a revenue increase of 10% to $251.9M. Seems like the sky is the limit when you're already in the clouds.

💻 $HPE (Hewlett Packard Enterprise), the 'tech titans', reported mixed results with Q2 revenue at $6.973B (+9% FXN) but fell short of the Street's $7.291B. It's like building a supercomputer but forgetting the power cable.

🖨️ $HPQ (HP Inc.), the 'print and PC prodigies', reported slightly lower total revenue than expected ($12.9B vs. the Street's $13.03B), but better op. margins at 8.7% and an EPS of $0.80. When the going gets tough, the tough get printing.

🌯 That's a wrap for the day. 🌯

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Fin-specto Revelio!