The Market Brief
Hey team. U.S. futures rose during early trading on Tuesday ahead of a busy day that will also feature inflation data and big bank earnings.
Impact Snapshot
🟥 CPI Inflation - 8:30am
Earnings (Before open): JPM 0.00%↑ BLK 0.00%↑ C 0.00%↑ WFC 0.00%↑
Macro Viewpoint
Earnings kick off today with the big banks reporting.
Banks have been one of the brighter spots in the market in recent weeks, with the usual focal points centering around Net Interest Income outlooks, capital markets activity/pipelines, and capital return plans.
July has historically been a tough month for financial stocks based on momentum investing.
CPI Scenarios
The risk/reward of this print is skewed to the upside as the market await the potential worst of tariff-induced inflation. After the recession warnings of 2023 and 2024, the market is not giving prognosticators the benefit of the doubt with calls for an inflation spike.
Core MoM prints above 0.37%. SPX loses 1% - 2%
Core MoM prints between 0.32% - 0.37%. SPX loses 0.50% - 1.25%
Core MoM prints between 0.28% - 0.32%. SPX gains 0.25% - 0.75%
Core MoM prints between 0.23% - 0.28%. SPX gains 0.75% - 1.25%
Core MoM prints below 0.23%. SPX gains 1.5% - 2%
Assuming this prints in line, the market refocused on August 1 trade deadlines, Aug 1 NFP, and then the Aug 12 CPI prints. Further, this print is unlikely to significantly shift Fed cut expectations.
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