US MARKET INTELLIGENCE | AFTERNOON BRIEFING

Research evidence excerpt

US MARKET INTELLIGENCE | AFTERNOON BRIEFING

relatively small cost within overall tech investment; despite higher projected expenses

over the next few quarters, the earnings impact is hard to estimate.

o Click here (or scroll below) to see the full macro readthrough and selected quotes

• THOUGHTS ON CPI – [We shared below in some IB chats immediately following the release]

For market Bulls this is even better than Goldilocks could have imagined. Inflation lower with

positive earnings growth. This print should remove any fears over a July rate hike and may

assuage fears on Sept, too. This sets up the market to move higher and to broaden as it does

so.

o Considering the short-term catalysts: (1) bank earnings; (2) inflation data; (3) growth data

proxied by Retail Sales; and (4) AI update via ASML / TSM …. Banks crushed it. Inflation

can be removed from the near-term risks. Retail Sales is trending towards a beat based

on cards data. AI … if the flare up in the Middle East may have helped Semis form the

bottom if we assume the market returns to the playbook from April / May with folks playing

offense via Tech and Energy.

o Earlier this morning the Small Biz Optimism Index ticked higher. The Plans to Hire sub-

index ticked up to its historical average of net-11% (# of biz looking to hire minus number

of biz not looking to hire or to layoff) and this tends to precede NFP by 2-3 months. 84%

of business hiring or trying to hire report few-to-no qualified applicants, the highest since

Sep 2024. Biz owners are reporting another increase in avg. selling prices, the 4th

consecutive increase. Inflation remains the most important problem for businesses.

Expectations for better biz conditions improved for the first time this year.

TMRW & THIS WEEK