Economic Outlook - Russia's economy likely returned to growth last quarter [1] - The economy dodged a recession despite pressure from ultra-high interest rates [1]

Economic Outlook & Business Sentiment - Cullen Frost Bankers sees customer agility in managing costs and passing them along, but the primary concern related to tariffs is uncertainty about a potential recession [4][5] - Businesses are delaying projects, not canceling them, due to recessionary worries, but increased clarity in trade policy could lead to renewed activity in the next 6-12 months [6] - Cullen Frost Bankers' loan pipeline is good, but many projects are being delayed; a Fed rate cut could stimulate activity [9] - Customers are trying to avoid raising prices to maintain market share and volume, suggesting limited inflationary pressure [10] Cullen Frost Bankers Performance - Cullen Frost Bankers experienced strong consumer activity in Q2, with a 37% jump in consumer deposit growth and strength in real estate loan products [1] Energy Sector - The energy industry is healthy at mid $60s per barrel oil prices, but significant production increases are unlikely at that level [12] - The industry is focused on efficiency rather than increasing production into lower price levels [13] - There's a growing bullishness around natural gas due to demand from data centers and increasing LNG capacities [14][15]

An Man Group investment manager is adding Japan’s financial shares to her portfolio on the view the nation’s central bank will need to hike interest rates to tame inflation https://t.co/BMqTHa4AmZ ...

A US inflation report is bolstering the case for traders betting that the Fed will soon cut interest rates, with some seeing an increased possibility of an outsize reduction https://t.co/Uct99h1KhB ...

Market Overview - Blackrock views the current investment environment as the best ever, though not necessarily meaning everything is going up [2] - Equity technicals are strong due to the amount of cash on the sidelines and buybacks relative to the IPO calendar, indicating high demand versus supply [3] - Equity volatility is low, making it cheap to own equities and hedge portfolios [5] - Markets tend to overreact to news flow, particularly in August, creating opportunities for investors [18] Fixed Income & Interest Rates - Fixed income portfolios can generate yield levels of 65% to 7% [4] - The speaker anticipates the Federal Reserve can cut rates, especially with signs of slack in the labor market [4][6] - The speaker believes the Fed funds rate can be lowered by 100 basis points, considering core CPI is running under 3% and five-year inflation break-evens are at 25% [8] - High interest rates are hurting low-income borrowers and increasing the cost of government debt [11][12] Economic Factors - Significant productivity gains are occurring due to technology investments and data utilization by large companies [13] - Inflation volatility has been incredibly low for the last 25 years, except for the pandemic period [14] - Complacency in the market is a concern, particularly in credit markets [16][17]

Market Sentiment & Performance - Bank of America's flow data indicates net selling of small-cap stocks by clients last week, while large and mid-cap stocks saw net buying [1] - 44% of fund managers surveyed believe large-cap stocks will outperform small-cap stocks this year, an increase from the previous reading [1] - The Russell 2000 is up only 1.5% year-to-date, indicating continued underperformance of small caps [1] Concerns & Cautions - B of A remains near-term cautious on the Russell 2000 index and does not expect any Fed rate cuts this year [2][4] - Tariff risk poses a greater threat to small caps due to their thinner margins [3] - Inflation remains sticky, leading to the expectation that the Fed will remain on hold, potentially negatively impacting the Russell 2000, which is sensitive to interest rates [4][5] - Small-cap earnings recovery has been slower than expected compared to large caps, with lofty expectations for the second half of the year [6][7] Opportunities & Recommendations - It is advisable to be selective within small caps, favoring mid-caps due to cleaner balance sheets and lower risk from tariffs and refinancing [8] - Despite risks, small caps offer wider performance spreads and alpha opportunities, with relatively cheap valuations compared to large caps [8] - Focus on higher quality areas within small and mid-caps, prioritizing stocks with positive revisions and stronger margins [9][10]

Inflation & Monetary Policy - The industry views it as difficult to argue for lower rates currently due to uncertainty about future inflation [1] - The industry notes that the pass-through of tariffs into higher prices has been modest so far, but it is still in the early stages [1] - Inflation is a key concern [2] - The industry believes there are no overwhelming signs of weakening economic activity that would necessitate monetary policy stimulus [2] - Current monetary policy stance is not considered tight [2] - There is no obvious reason for lower rates [2]

🇺🇸 US July CPI steady at 2.7%, core CPI ticks up to 3.1% (vs 3.0% est)With inflation largely in line but core slightly hotter, markets eye possible Fed rate cuts next month. 📉💵 https://t.co/t8BQRxmsjt ...

BREAKING:🇺🇸 TRUMP JUST SAID TARIFFS HAVENOT CAUSED INFLATION AND POWELLSHOULD LOWER RATES NOW. https://t.co/1ERK4nP8Uz ...

BREAKING:🇺🇸 TRUMP JUST SAID TARIFFS HAVENOT CAUSED INFLATION AND POWELLSHOULD LOWER RATES NOW. ...