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. ...

Core Insights - Home Depot, Inc. reported a slight decline in total comparable sales by 0.3% in Q1 fiscal 2025, but six out of sixteen merchandising departments, including appliances and building materials, showed positive comparable sales, primarily driven by the Pro customer segment [1][8] - The company faces challenges from elevated interest rates impacting large-scale remodeling projects, particularly in kitchens and bathrooms, although transactions over $1,000 experienced modest growth, indicating selective higher-value spending [2][8] - Seasonal factors in Q2 may boost demand for construction and repair projects, with appliances likely benefiting from replacement cycles and competitive promotions aimed at value-conscious consumers [3][4] Financial Metrics - The Zacks Consensus Estimate for Home Depot's Q2 sales indicates a year-over-year growth of 5.4%, while earnings per share (EPS) is expected to see a marginal increase of 0.9% [5][8] - Current estimates for Q2 sales stand at $45.51 billion, with a year-over-year growth estimate of 5.42% [6] - The current EPS estimate for Q2 is 4.71, reflecting a year-over-year growth estimate of 0.86% [7] Market Performance - Home Depot shares have increased by 10.7% over the past year, outperforming the industry growth of 6.4% and key competitors like Lowe's (1.6% increase) and Floor & Decor (-24.7% decrease) [9] - The company trades at a forward price-to-sales ratio of 2.29, which is higher than the industry average of 1.62, indicating a premium valuation compared to peers like Lowe's (1.57) and Floor & Decor (1.69) [10]

And very importantly, we have to get interest rates lowered in our country. Our country is the hottest in the world right now. But the one section people are pretty much unable to buy housing.Yes. Because the interest rates are too high. We have no inflation. We have a lot of cash coming in.The tariffs have been unbelievable. Now people that didn't even believe in tariffs are saying what a great move that was. We have hundreds of billions of dollars coming in.Japan just on one deal is paying us $550 billion ...

US stocks rose on Tuesday after the latest consumer price index report stoked bets that the Federal Reserve is virtually certain to resume cutting interest rates next month https://t.co/4j3joQGHfS ...