US MARKET INTELLIGENCE | AFTERNOON BRIEFING

Research evidence excerpt

US MARKET INTELLIGENCE | AFTERNOON BRIEFING

• US MACRO DATA TOMORROW: Mortgage Applications at 7am ET. Current Account Balance

at 8:30am ET. New Home Sales at 10am ET. Building Permits (revision).

• US EARNINGS TOMORROW: CBRS, MU, PAYX

• GLOBAL MACRO DATA TOMORROW: (Germany) IFO Business Climate at 4:00am ET.

(Japan) Japan Buying Foreign Bonds at 7:50pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

A tech-led selloff today, starting from the overnight Asia session. Despite the index level weakness,

underlying price actions were a lot better: more than half (58%) of the SPX companies actually finished

higher today: we saw outperformance across Defensives (Staples, Pharma), Financials and Airlines. On

today’s tech weakness, there was no particular strong catalysts to this global selloff, with positioning

and anticipation ahead of MU earnings tmrw being the most mentioned reasons. Our trading desk flag

there was no panic or urgency in the flows. From our TMT Trader Brain Heavey: “We are a touch better

for sale system wide (Sold ~1B vs. bot $700m) w/ HT flows much better to buy. Zero panic in the flows

so far.” All eyes on MU earnings tmrw; see the preview from JPM TMT specialist Josh Meyers below.

• US MKT INTEL VIEWS ON FLASH PMIs – We sent below in some IB chats earlier today: This

is a good print and points to resilient growth though S&P’s Economist is less rosy, “… current

output levels are consistent with an economy struggling to growth much faster than a 1%

annualized rate in the second quarter”. To clarify, this 1% growth is based solely on these PMI

signals. For reference, Feroli has a 3.0% for 26Q2 having upgraded the forecast multiple times

over the last few weeks up from 1.5% in early May. Input prices remain an issue pointing to