Major indices are moving marginally lower and off their morning highs. Small caps, represented by Russell 2000, are the only exception and moving marginally into the green.

Notably, the move today comes even as magnificent seven names barely move from their baselines.

Energy (XLE) is the clear leader today and getting a boost from an uptick in energy commodity prices as Iran tensions continue following the attack on two ships in the strait last night as well as the continuation of the US blockade. Meanwhile, Technology (XLK) is at the bottom of the list following an adverse reaction to Applied Materials (AMAT) earnings. Health Care (XLV) is also lagging, with Eli Lilly and Company (LLY) contributing to the move lower after the CEO of Novo Nordisk (NVO) defended their lawsuit against the company. The allegation points to Lilly's weight-loss drug advertising misleading consumers by comparing its highest doses against lower doses of Novo's medicines. A court is set to consider Novo's request to block the ads on Monday.

The Ten-Year Treasury Yield (TNX) is up 4.7 basis points and also getting a boost from the uptick in energy commodity prices.

However, rate hike expectations continue to fall following a report this morning from Morgan Stanley which expects the Fed to hold interest rates through the end of the year as inflation eases.

News from the Future

Reports are circulating that Tesla (TSLA) plans to unveil the new Roadster potentially as early as this month. The vehicle has been teased to be the first flying car with SpaceXAI (SPCX) collaborating to add the capability. This certainly would be a step into the future, but regulatory hurdles remain.

In other futuristic news, Quantinuum (QNT) and Quanta Computer signed a deal to jointly build out manufacturing capabilities and infrastructure for future quantum systems.

Economic Data

Michigan Consumer Sentiment for August fell to 51 from 55.2 and below forecasts of 54.5.

Both the Expectations Index and the Current Conditions Index fell below expectations. Notably, 5-year inflation expectations remained anchored around 3.3%, while year-ahead expectations inched higher to 4.3%.

Have a great weekend!

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