US MARKET INTELLIGENCE | AFTERNOON BRIEFING

Research evidence excerpt

US MARKET INTELLIGENCE | AFTERNOON BRIEFING

towards larger cap companies. Let’s see what happens at the press conference but think

the attention shifts back to Mag7 earnings and whether we can / have bottomed in Semis

… feels like we are nearly there and worthwhile to read the latest from our Positioning

team.

o FED DAY PRESS CONFERENCE [The comment was sent ~20min after the press conf

began] Warsh’s phrasing of the economy as being solid with a solid labor market points to

consumer health and subsequent spending which should continue to drive the economy.

Further, SPX earnings are tied to nominal GDP growth and not real, so an acceleration

there and we should bank on seeing more impressive quarterly earnings into and through

2027. For as hawkish as Warsh appeared to be (or perhaps wanted to be) he takes an

approach not dissimilar from a football coach, “take it one game (meeting) at a time” to try

to break the linkage on the dependency of successive Fed actions. That said, the wait

and see approach and the probability of a Trump pivot that craters oil prices may be how

the market is thinking about things. Avoiding a hiking cycle is benefitting the Tech tape.

Nothing here changes our bullish view and we think that we are on the precipice of an

Equity rally with Tech regaining its leadership.

• DAILY EARNINGS MACRO READTHROUGH – We want to highlight P&G’s comments on their

inflation outlook: “Most of this [cost] impact will be felt in the first half of fiscal ’27, as those

materials were produced when the underlying oil price was above $100 a barrel.” For reference,

JPM Econ sees U.S. CPI averaging 3.5% in 3Q and 3.6% in 4Q before declining to 3.0% in

1Q27 and 1.9% in 2Q27. However, it seems that what corporates are seeing is a stickier inflation