Good morning, investors. In December, veteran strategist Jay Woods joined me on Full Signal and said it’s time to rebrand the Mag 7 as the “Lag 7,” and that call has largely been right in the market’s view.

But lagging share prices haven’t seem to have undercut earnings in the slightest.

The Magnificent 7 have fallen out of favor as a group but they still dominate earnings season.

Wall Street sees the Big Tech names growing earnings 31.1% year-over-year in the second quarter, outpacing the rest of the market by almost double digits. 

According to FactSet estimates, the S&P 493 is expected to grow earnings at 22.8% compared to a year ago.

That in itself would mark the strongest rate since the end of 2021, but even that won’t be enough to keep up with the household mega-cap technology names. 

The Magnificent 7 as a group are relatively flat this year, while the equal-weight S&P 500 has gained more than 10%.

Still, only one of the five biggest contributors to earnings growth for the index is a Magnificent 7 company: 

If you strip out Nvidia and Micron, earnings growth for the entire index slows from 24.7% to 16.8%, which means two names account for roughly a third of the entire market’s growth in the quarter.

Notably, the dominance of the Magnificent 7 is expected to wane through the rest of the year while the un-Magnificent 493 are seen improving their earnings growth beyond Big Tech. 

Analysts see the Magnificent 7 growing earnings 31.8% in the third quarter against 25.5% for everyone else.

By the fourth quarter, that flips. The S&P 493 is expected to grow earnings 25.3% compared to 22.8% for Big Tech.

That said, it remains true today that the trade investors gave up on still runs earnings season.

SK Hynix makes the high-bandwidth memory that sits alongside chipmakers's accelerators, which ties its results to the pace of the AI buildout.

The Direxion Daily SK Hynix Bull 2X ETF (SKHL) seeks 200% of the daily performance of SK hynix through swaps referenced to its Nasdaq ADR.

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🛢Oil prices climbed as US strikes on Iran stretched into a ninth straight day. Iran’s Houthi allies declared a maritime embargo on Saudi Arabia that threatens roughly 4 million barrels a day of Red Sea flows. (CNBC)

🛑 The Paramount-Warner Bros. merger is on pause. A judge stopped the $81 billion deal for at least two weeks to give states more time to pursue their legal challenge. (AP)

📈 Domino's Pizza stock jumped 7% after beating earnings estimates. The chain delivered $1.19 billion against a $1.18 billion consensus even as EPS of $4.07 missed the $4.17 mark. US same-store sales rose 0.1%. (Reuters)

🏦 Americans oppose government equity stakes in US companies by more than 2-to-1. A new survey found 49% called it inappropriate for Washington to take ownership positions in private firms while 19% said it was acceptable. (CNBC)

🗓 July 21, 2010: President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, the biggest overhaul of US financial supervision since the 1930s. The law aimed to end the notion of "too big to fail.”

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SKHL is non-diversified and concentrated in a single company. Investing in the Fund is not equivalent to investing directly in SK hynix. An investor should carefully consider a Fund's investment objective, risks, charges, and expenses before investing. A Fund's prospectus and summary prospectus contain this and other information about Direxion ETFs.

To obtain a Fund's prospectus and summary prospectus call 866-476-7523 or visit direxion.com. Significant risk involved. ALPS Distributors, Inc.