Good morning,

Yesterday was a beautiful summer’s day: blue skies, sunshine and new all-time highs. Amidst growing optimism for a diplomatic resolution in Iran and strong earnings the S&P 500 opened up ~0.4% just above the previous all-time high hit in June and didn’t look back, ending the session up nearly 2%. Tech did much of the heavy lifting with the NYSE 100 up ~3.5% but the gains were broad based. Once again energy and defensive/yield-oriented sectors underperformed. Oil prices fell >5% with ICE Brent breaking below $80 which helped Treasury yields pull back from the recent highs. Putting the earnings strength in perspective with about 70% of companies in the S&P 500 having reported Q2 500 EPS growth is up ~50% y/y. This does include ~$150B of investment gains at Amazon/Google excluding that, growth is still up ~30%.

Futures are pointing to another higher open. Iran deal hopes have not faded despite a Saudi tanker being attacked in the Red Sea. Oil prices and Treasury yields ticked up modestly on those headlines overnight. It continues to be busy on the earnings front. S&P futures are at session highs up ~0.5%.