Calendar

This Week – ORCL, ADBE and KR earnings, but that’s it. The real show is the debate Tuesday and CPI Wednesday into PPI Thursday hopefully giving the 50bp cut fans what they want.

Wednesday – CPI, KR earnings

Thursday – PPI, ADBE earnings

Friday – Import/Export Prices

Trading Observations

• CPI inline, Core a touch hot.  Doesn’t help the 50 bps cut argument.

• Or have we moved completely to employment for the Fed narrative?

• Employment metrics YTD- Weekly Claims +15%, Unemployment Rate +14%, Layoffs +11%, JOLTS -14%, ADP Payrolls -37%, Nonfarm Payrolls -45%

• Maybe a bright spot from the labor mkt- The Modified Sahm Rule [substackcdn.com] is not as ominous

• NDR suggests cuts with a soft landing lead to 25% upside historically.  BBG consensus Recession Odds remain at two-year lows, 30%

• NVDA – Jensen speaks at 9:20 am at Goldman Conf.  Keep an eye on NVDA and rest of tech as we know AI has been our driver.

• Tomorrow- ECB Rate Decision at 8:15 am, PPI and Weekly Claims at 8:30 am, Household Change in Net Worth at noon, Monthly Budget Statement at 2:00 pm, Fed Balance Sheet Update amc

• 5400 is support.  5505 (50-day) is resistance

Futures

DOW -139

S&P -3

Nasdaq +29

10-Year Yield - Slight move up this am after CPI and likely 25 bp cut vs 50 bp

Oil - 52 week low - Good level to fill up those reserves

BITCOIN

Consumer/Financial Healthcare

A report by Goldman seen by the FT shows that Money Market hedge funds have experienced net client withdrawals of more than $30B in the 12 months ending June, the 1st time they have suffered outflows since 2016. This is a “significant turn in the tides”, Goldman said in the report.

Dave & Buster’s (PLAY) jumps 13% after the restaurant chain reported second-quarter profit that came in ahead of estimates. Analysts highlighted the company’s margin performance.

Trump Media & Technology (DJT) shares fall as much as 18% in premarket trading on Wednesday following the US presidential debate between Democratic nominee Kamala Harris and Republican rival Donald Trump.

ALLY closed down 17.5% yesterday following its update disclosing higher credit loss expectations and a lower NIM trajectory.

Technology

AI: majority of proxies closed in green ystdy post ORCL (ex HPE / TSMC - both lagging for idiosyncratic reasons). NVDA speaking later key ... AVGO +5% nice hold 200D; aggressively supply seen on Fri hasnt returned .. TSM cont to see HF selling into upticks

AMD - Oracle Exec: AMD Gaining Favor in Nvidia-Dominated Market for AI Chips. “There’s a lot of effort being put into AMD, and [the company is] doing a good job” at improving its chips’ performance, he said.

NVDA: Jensen speaking @ 10:20am ET, #1 focus for all ... shrs up 3 out of 4 but doesnt feel like it; despite positive Trendforce blackwell data pt/ORCL commentary, stock couldn’t reclaim 100D. This could be one of the final catalysts/metrics for a bit. Stock action today will be very telling.

NOW: McDermott on CNBC last night - CEOs need to avoid “the pretenders” in AI and pivot spend to real value add products ... speaking @ GS today 1:50pm ET

PLTR: -2.7% 10mm shr block @ BofA last night, pretty tight given move we've seen

MSFT: CTO presentation very high level but a huge amount of AI enthusiasm ... “lots of super good stuff coming.” Noted that demand for infrastructure has materially outpaced ability to supply

AVGO: showing signs of life post Friday puke / held 200D ... benefit of Wi-fi 7 in iPhone 16 for AVGO; co was also doing 1x1s at GS; and obviously bullish comments by ORCL helped + AMZN AWS CEO talking up inferentia

AMZN: said it would spend $10.5B in the UK to grow its cloud business, adding to a string of recent expansion moves in Europe

Industrials 

Renewables – Solar (ENPH etc) all rallying this morning following last nights debate.

ALB/ALTM - Lithium stocks trading higher pre-mkt on speculation that battery giant Contemporary Amperex Technology Co. halted production at a major mine easing oversupply concerns for the material.

Badger Meter (BMI) Rated New Buy at Seaport Global Securities; PT $235