Wolfe Research's Chris Senyek: We're encouraged by earnings season so far

Market Trends & Economic Outlook - Wolf Research notes new market highs led by industrials and tech, viewing these sectors as economic stalwarts [1] - The market may consolidate by 3% to 5% due to typical seasonality, upcoming inflation and job reports, and the Fed's September meeting [14] - There's a risk the Fed might not cut rates in September due to the lagged impact of tariffs and a potentially stronger-than-expected growth outlook [8][15] - A fiscal stimulus bill could add up to $250 billion to $300 billion of stimulus to the economy over the next 12 months, though this is debated [10] Earnings Season & Company Performance - Earnings results have been solid, with 3M showing margin expansion despite tariffs, offset by a weaker dollar [1][2] - A weaker dollar has been helpful for companies like 3M and PepsiCo, but a stronger dollar could increase the sting of tariffs [5][7][8] - Companies are rolling off hedges and not re-hedging due to previous losses, anticipating a weaker dollar [4] Monetary Policy & Currency Market - Implied volatility on earnings is lower than it has been in almost 20 years [3] - The market is potentially too optimistic about Fed rate cuts [8] - The biggest reason for potential rate cuts is the government debt situation, needing to roll a lot of paper [15]