Given that I switched countries & time zones, please note that it may take a few days to get back up to speed on our morning thoughts. Previously this was being written from London, now from the east coast.

Oil didn't break and has been creeping back up after a nasty fall. China's potential re-opening is leading to a healthy open in equities but more importantly oil is up 1.5% on this news. The Fed can't beat inflation unless oil is in-check.

China reduced travel quarantine requirements by 50% - this is a big deal. Beijing has successfully showed who is "in charge" and now they can re-open rationally. This is VERY bullish. We doubt there will be China covid closures until the weather cools off.

JetBlue strengthened its offer for Spirit. Hawkish comments from ECB officials sent German 5-year yields up 10 basis points. FX chatter is still negative on the British Pound, as the Brits are positioning themselves for more Brexit reversals.

Bloomberg has a fundamental snippet that echoes a lot of what we have been reading over the past 3 weeks: there is a ton of bearishness out there. The feeling here at the AM Brew is that, yes, we could see a quick drop to 3200 on the S&P, but that would likely be lightning quick and it is earnings and interest rates that will dictate moves away from the 3800/3900 level on the S&P. July is going to be a big month - earnings will dictate where the stock market goes. The valuation compression will be dictated by interest rates, which appear to be done rising.

End-of-quarter optics has never been a concern for us, but these few days offer a good opportunity for managers to clean up the optic mess, as the June 30th statements will be carefully scrutinized. Banks should be announcing buybacks & dividend increases after the successful stress-test review. Banks also look cheap both on an absolute and relative basis. That said, there is no short-term good news in the financial sector - any bank or brokerage longs should have a long time horizon. Jefferies (JEF) comments last night were negative, citing weakness in mortgages & IPOs, combined with higher expenses and difficulty financing LBOs. This should be a common theme this July.

NKEs' gross margin disappointed as shipping problems meant they had to book more container related inventory. Could we see inventory problems from other companies in July?

If this little mini-rally goes a few more days, there will be a good short-term opportunity to fade the indices. The fundamentals still are not good outside of energy. Even metals are weakening hard & fast. Yesterday's DeMark timing updates agree with the fundamental picture.