MU post-close earnings rescues stocks
June 25, 2026
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–PCE prices today with yoy expected 4.1 from 3.8 and Core 3.4 from 3.3. Perhaps not as important given oil’s slide, with WTI now sub-70 and dollar index making new highs. 2/10 treasury spread closed at a new recent low 26.5, not seen since March 2025, indicative of what might be framed as a tight Fed. 10y treasury-tip breakeven edged to a new low of 219.7. Spot gold below 4000, down 29% from January’s high print 5595. Even copper has had a modest pullback from the highs.
–2y yield ended yesterday at 4.135% down 6.1 bps (at futures settle), while tens fell 9.3 to just 4.40%. Near SOFR contracts are hesitant to price any near term easing with the lowest contract SFRH7 up 6.5 at 9592.5 or 4.075, still 44.5 bps above the current Fed Effective of 3.63; nearly 2 HIKES priced. However, greens and blues were up 10-10.5. Peak contract, now SFRH29, settled 9623.5, still at a higher yield than EFFR. What is interesting is that the peak contract is nearly three years forward…it had been more like 2 years forward. To me, the easiest trade on the board is to play for the peak contract moving forward in time (Not a recommendation). My personal view is that the Fed will ease at least twice this year, starting in Sept or Oct. (Predicated on a bubble pop; note that Mag 7 are all significantly below year’s highs except for AAPL). Yesterday’s New Home Sales were dismal at 580k, apart from January at 576, the lowest level since late 2022.
–The day ended with MU shattering expectations and ramping after-hours prices in stock indexes to yesterday’s highs, or just above in NQU. Equity strength has barely dented TYU price, now 109-30, in front of today’s 7yr auction. Talk of heavy rebalancing for quarter end out of stocks into bonds. (How about back into gold??). As a side note SPX/XAU has been straight up since March (as gold had peaked). Now 1.845, recent high in middle of 2025 was 1.943 which I believe will be huge resistance.
–Heavy seismic activity in last 24 hours with a huge 7.5 quake in Venezuela leading to high casualties. Also a 6.9 in Kuji Japan, 5.6 in Redwood Valley CA and 5.4 in Papua New Guinea
