Investors are also bracing for some possible added volatility today as index futures, stock index options, and stock options expire, aka “triple witching.” 

Most expect options expiration to have only minor impacts today that will likely only affect institutional traders. However, some big price swings could result from the quarterly rebalancing of many US benchmark indexes.

With Nvidia’s massive gains this quarter, it’s expected that fund managers will be forced to buy billions of dollars' worth of Nvidia stock. Those shares will likely replace billions of dollars' worth of Apple stock, which has lagged far behind Nvidia this quarter and thus could get a lower weighting during rebalancing.

Existing Home Sales and flash reads on the PMI Composite the only data, and CarMax the only earnings of note today.

Looking to next week, Wall Street is anxious to see the May PCE Prices Index on Friday.  The PCE core prices in April were unchanged at +2.8% year-over-year.

Other data next week includes the FHFA Housing Price Index, the S&P Case-Shiller Home Price Index, and Consumer Confidence on Tuesday; New Home Sales on Wednesday; Pending Home Sales, the third estimate of Q1 2024 GDP (gross domestic product), and Durable Goods Orders on Thursday; and Consumer Sentiment on Friday.

On the earnings front next week, Micron Technology on Wednesday will be the tech highlight. The company is a key supplier of high-bandwidth memory chips used in AI computing.

Don't forget... the first US Presidential Debate is scheduled for next week, Thursday, June 27. The trade is paying close attention as there's some talk and chatter regarding the timing of this first debate and the fact it's scheduled ahead of each party's official nominating conventions. There's are some rumors on Wall street that the Democrats are going to be paying very close attention to how President Biden holds up in the fire, as there would still be time to find another possible nominee. This would make the market a bit more uncertain as a "wild-card" could be tossed into the game late, making the bulls pause and more than likely the market pullback until it learns more.

Yellowstone" Announce Date for Final Episodes: At long last, Yellowstone has announced a premiere date for the second half of its fifth and final season. The Western drama’s last episodes will begin Sunday, Nov. 10, at 8/7c on Paramount Network. Production on season 5B is still currently being filmed in Montana. By the time Yellowstone returns for its final installments, it will have been off the air for almost two years. 

Louisiana Public Schools Will Now be Required to Display the Ten Commandments  in every classroom following a new law signed yesterday by Republican Governor Jeff Landry. It's the first state to take such action and Louisiana's legislation mandates a poster-sized display of the religious rules in large, easily readable font for kindergarten classrooms up to state-funded universities starting in 2025. In the Christian and Jewish faiths, God revealed the Ten Commandments to the Hebrew prophet Moses. Civil rights group ACLU and its Louisiana chapter, along with Americans United for Separation of Church and State, and the Freedom from Religious Foundation announced they would file a lawsuit to challenge the law requiring the commandments be displayed. There's talk that other states may soon follow. Source USA Today

Car Dealerships Will Likely Be Offline Several More Days: Auto retailers across the US are likely to be out of service for days following a second major cyberattack at CDK Global, the software provider that thousands of dealers rely on to run their stores. “At this time, we do not have an estimated time frame for resolution and therefore our dealers’ systems will not be available likely for several days,” the company said in a communication sent to customers on Thursday. CDK informed customers Thursday of the incident, which occurred late the prior evening. The company shut down most of its systems again, initially saying that its dealers’ systems “will not be available at a minimum on Thursday.” On what otherwise would have been a busy US holiday for business, dealers reliant on CDK were unable to use its systems to complete transactions, access customer records, schedule appointments or handle car-repair orders. The company serves almost 15,000 dealerships, supporting front-office salespeople, back-office support staff and parts-and-service shops. The National Automobile Dealers Association said Wednesday it was actively seeking information from CDK to determine the nature and scope of the cyber incident.  Source Bloomberg

Fast-Food Customers Shifting to Casual Dining Chains: Casual-dining chains are gaining customers who have grown frustrated with higher fast-food prices, Darden Restaurants CEO Rick Cardenas said on Thursday. While Darden itself hasn’t benefited from the shift, its competitors, like Chili’s owner Brinker International and Applebee’s parent Dine Brands, have been reigniting a rivalry with their fast-food counterparts — and it seems to be working. On Darden’s quarterly earnings call Thursday, Cardenas told analysts that industry data is showing “a little bit of a shift from quick-service restaurants to some of those competitors” in casual dining. As of May, full-service menu prices had risen 3.5% over the last 12 months, compared with a 4.5% increase for those of limited-service eateries, according to Department of Labor data. The overall consumer price index rose 3.3% in that period. In particular, McDonald’s has faced backlash from customers, social media users and even House Republicans for its higher prices. In an open letter in late May, the company’s U.S. president, Joe Erlinger, hit back at critics claiming its menu prices have doubled, saying its prices are up just 40% since 2019. Source CNBC


SEC Turning Its Gaze to “AI Washing”: Since March, the US Securities and Exchange Commission has accused three companies of misrepresenting how they use machine learning and other tools—so-called AI washing. The moves follow multiple warnings from SEC Chair Gary Gensler and the regulator’s top enforcement attorney over misstatements around artificial intelligence. While Gensler has referred to AI as “most transformative technology of this generation,” he has also said it could spark a financial meltdown. Even before the recent SEC cases, the agency had proposed new restrictions for brokerages and advisers using AI. Lawyers contend the enforcement actions brought so far around AI washing are similar to those involving statements some companies made about Covid treatments and ESG. US securities rules make it illegal for firms to make misrepresentations to investors. Attorneys are seeing some parallels to how the SEC acted in the early stages of its push to rein in the crypto industry. Still, they emphasize that digital assets trip up the regulator’s rules in ways that AI doesn’t.  Source Bloomberg


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