pre mkt thoughts 18 Jun 26

Yields convulsed post the fed meeting and the signing of the Iran deal. Post the Fed, we had 2Y yields up 15bps while the long end softened by about 5bps in a flattening move.
In asian trading, KOSPI and NKY are both up 1-2% to hit their respective ATHs. This is with SPX weakening into the close in NY trading. My own read into the Fed meeting is - dont read too much into it. Warsh has to tread a fine line. If anything, listing out productivity growth basically gives an excuse to run it hot without needing to hike rates.
In NY trading yesterday, neoclouds as a sector outperformed until the convulsion in SPX. However, $NBIS was extremely resilient in spite of the overall sogginess in the index yesterday, making a new ATH. IMO, the repricing in neoclouds is set to continue AS inference needs means a lengthening of the overall lifecycle of GPUs and hence; reducing depreciation - which is one of the biggest expenses for neoclouds. This means a move from 20% IRRs to 30% IRRs.... there are people smarter than me who have modelled it out. Take a look at those models and their assumptions.
In other sectors, memory continues to hold firm with $MU hugging the top end of the range pre earnings. Today we have some news coming out from $GOOG exploring the usage of the chinese chips. $CXMT and $YMTC are also IPOing soon in China. This could be something to watch out for! Meanwhile the narrative for NAND continues to hold strong. Especially if HBF becomes a reality. $SKHYNIX is also set to list an ADR in the US - i would expect $SKHYNIX to continue to outperform till then! $SOXX rebalancing also happens today - $MU being the highest weight is set to get it trimmed down to 8% - a huge portion of the flow has probably been executed already, hence i would expect to see strength post the rebal.
If you have been following my notes - you would see that i called to trim profits on monday, deploy into the tuesday weakness and then to HOLD and wait. At this juncture, trading wise - on the balance of probabilities, we probably continue to guide upwards. Especially on semis. This is because regardless of whether the fed is dovish or hawkish, the only sector strong enough with profit growth is...semis. In fact, if the fed is hawkish, the only investable sector becomes semis.....just from the sheer profitability AND growth in the sector. The Fed leaning dovish will allow for the rally to broaden out while a hawkish Fed probably causes concentration.
Good luck!