I think that's right. I believe that. But here's what's happened.The Fed now says, "Well, we'll make a decision about interest rate cuts depending on whether prices of goods in the next month or two go up." Well, what that's really saying is they must be doubting their own inflation fighting credibility. If they were a very credible central bank, they could say, "We're looking past this one-off change in prices." And so, their hesitancy to cut rates, I think, is actually quite a quite a mark against them. I ...

Market Trends & Economic Outlook - US stock futures are treading carefully as bond yields have picked up, leading investors to scale back bets on Federal Reserve interest rate cuts [2] - The 10-year Treasury yield has added nearly 15 basis points in the past week, approaching 45% [5] - Traders reassess expectations for Federal Reserve interest rate cuts as price increases accelerated in June [5] - The market is closely watching President Trump's trade plans and potential tariffs on pharmaceutical companies and semiconductors, assessing their impact on inflation [6] - Bets on Federal Reserve interest rate cuts are fading as recent data has shown signs of sticky inflation, with core prices increasing 29% in June compared to the prior year [47] - Traders now see just a 52% chance the Fed cuts rates in September, down from a 70% chance seen just a week ago [48] AI & Technology Sector - Nvidia closed at a record high, above $170 per share, with plans to sell H20 AI chips in China [7] - ASML, a supplier of computer chipmaking equipment, said it may not achieve growth in 2026 due to macroeconomic uncertainty and geopolitical developments; shares fell more than 7% in pre-market trading [8] - The AI trade is considered to be in a 3-5 year bull market, but may be overheated in the short term [10][11] - Apple announced that it would buy rare earth magnets from MP Materials in a $500 million deal [46] Banking & Financial Performance - Bank of America reported adjusted earnings per share of 89 cents, higher than analyst expectations of 85 cents, with revenue at $265 billion [16] - Bank of America's net interest income for the second quarter came in at $1467 billion, above estimates for $146 billion [18] - Bank of America's trading revenue in the second quarter came in at $538 billion, exceeding the street's expectation of $494 billion [19] - Bank of America's investment banking revenue came in at $143 billion, slightly above estimates for $127 billion [21] Precious Metals Market - Silver has risen more than 28% this year, outperforming gold and copper [24] - Croup forecasts silver to continue to soar above $40 an ounce [24] - Central banks have been a huge determining force in their buying of gold, with over 1,000 tons bought in each of the last three years [31] - Trump's tariffs on copper threatening to be 50% on August 1st, we're seeing a lot of front running in this trade [28] Healthcare Sector - Johnson and Johnson reported second quarter adjusted EPS of $277, boosting its full-year sales outlook to a range of $932 billion to $936 billion and full-year adjusted earnings per share to a range of $1080 to $1090 [42][43] - The pharma sector is bracing for potential tariffs from President Trump [44] Impact of Tariffs - Rio Tinto said that US tariffs on its Canada-made aluminum have added $300 million in costs in the first half of this year [39] - Trump hit Canada with a 50% tariff on aluminum and auto parts in June [40]

Federal Reserve Policy - Market expectations for rate cuts are becoming increasingly difficult to justify based on CPI data [1] Inflation & Market Expectations - The market is expecting rate cuts [1]

Inflation & Interest Rates - India's inflation eased for the eighth consecutive month [1] - This strengthens the case for further interest rate cuts by the central bank [1]

Group 1 - BOC Aviation (BOCA) delivered 13 aircraft in 2Q25, maintaining flat year-over-year (YoY) and increasing two quarter-over-quarter (QoQ), with a total of 24 aircraft delivered in 1H25, which is an increase of six YoY and four half-over-half (HoH) [1] - The firm’s self-owned fleet grew to 441 aircraft by the end of 1H25, up 12 YoY and six HoH, while the order book increased to 351, reflecting a growth of 132 YoY and 119 HoH [1] - Aircraft lease rates are trending upward, with the Airbus A320NEO lease rate rising approximately 6% YoY as of February 2025, supporting high-priced contract execution and potentially lifting gross lease rental yields [2] Group 2 - The firm sold 14 self-owned aircraft in 2Q25, an increase of three YoY and 10 QoQ, with a total of 18 self-owned aircraft sold in 1H25, also up three YoY [3] - The market value of the firm’s self-owned fleet exceeded book value by 15% as of the end of 2024, indicating that steady aircraft disposals could improve fleet quality and realize asset premiums [3] Group 3 - The firm has a higher exposure to floating-rate liabilities (27% at end-2024), making it more sensitive to interest rate cuts compared to leasing peers, with historical share price movements closely tied to US Treasury yields and interest rate cut expectations [5] - In previous periods of rising interest rate cut expectations, the firm’s share price increased by 18.7% from its trough to peak in November 2023 and climbed 26.2% by July 2024, suggesting potential short-term catalysts for share price [5] Group 4 - Improved aircraft deliveries are expected to drive up gross lease rental yields, while overseas interest rate cuts may lower financing costs, leading to a steady recovery in the firm’s return on equity (ROE) [6] - The firm’s historical average valuation has shown a strong correlation with its ROE, indicating that ROE expansion could provide room for a steady rise in valuation [6]

Monetary Policy - Mexico's central bank indicated a likely deceleration in the pace of interest rate cuts [1] - The signal follows last month's 0.5 percentage point reduction [1]

Chile’s consumer prices fell twice as much as expected in June, fueling expectations that the central bank will resume interest rate cuts this month https://t.co/fxVZLYUfoE ...

Asia Pacific Equity Research 30 June 2025 J P M O R G A N Mid-Year Prospects Consumer Discretionary This report forms part of J.P. Morgan Australia Mid-Year Prospects series as we take stock at the mid-point of 2025 and set out our Top Picks and Least Preferred stocks for the remainder of the year. Top Pick –Harvey Norman (HVN AU, OW) Leverage to housing cycle an earnings tailwind. Harvey Norman offers late- cycle exposure to housing, driven by a category mix which is highly leveraged to housing activity, s ...

Company Overview - Virtus Investment Partners (VRTS) shares increased by 6.3% to close at $200.71, with notable trading volume exceeding typical levels [1] - The stock has gained 10.5% over the past four weeks, indicating positive momentum [1] Market Sentiment - Broader market optimism regarding potential trade agreements and expectations of earlier interest rate cuts by the Federal Reserve has positively influenced investor sentiment towards finance stocks [2] - Investors are seeking better investment options for higher yields, which is expected to lead to inflows for asset managers, positively impacting their revenues [2] Earnings Expectations - Virtus is projected to report quarterly earnings of $6.17 per share, reflecting a year-over-year decline of 5.5% [3] - Expected revenues for the upcoming quarter are $188.7 million, down 7.1% from the same quarter last year [3] Earnings Estimate Trends - The consensus EPS estimate for Virtus has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook [4] Industry Comparison - Virtus operates within the Zacks Financial - Investment Management industry, where SEI Investments (SEIC) also holds a Zacks Rank of 2 (Buy) and has seen a 7.7% return over the past month [4][5] - SEI's consensus EPS estimate has increased by 2.9% over the past month, reflecting a year-over-year change of 9.5% [5]

Market Overview - U.S. stock markets experienced a successful June, with the Dow, S&P 500, and Nasdaq Composite increasing by 4%, 5.7%, and 5.7% respectively, closing at record-high levels for the first half of 2025 [1] - Despite this success, the first half of 2025 marked the weakest performance for the indexes since 2022, with potential catalysts for the second half including a U.S.-China trade deal, anticipated interest rate cuts by the Fed, and reduced recession fears [2] Imaginary Portfolio - An imaginary diversified portfolio was created, consisting of five stocks that each gained over 50% in the first half of 2025, with further upside potential indicated by favorable Zacks Ranks [3][4] Company Highlights Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in capital equipment, AI-powered data center infrastructure, and digital commerce, with a focus on product diversification [7] - Expected revenue and earnings growth rates for Jabil are 5.9% and 18.5% respectively for the next year, with a 9% improvement in the Zacks Consensus Estimate for next-year earnings over the last 30 days [9] Howmet Aerospace Inc. (HWM) - Howmet Aerospace is experiencing growth in the commercial aerospace market, supported by robust build rates and recovery in wide-body aircraft, along with strength in its defense aerospace business [10] - Expected revenue and earnings growth rates for Howmet are 8.5% and 29% respectively for the current year, with a 0.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] CVS Health Corp. (CVS) - CVS Health is investing in technology to reduce costs and enhance customer experience, with improved Medicare Advantage star ratings aiding its position [12] - Expected revenue and earnings growth rates for CVS are 3.5% and 12.6% respectively for the current year, with a 2.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [14] Carvana Co. (CVNA) - Carvana's acquisition of ADESA's U.S. operations has strengthened its logistics and auction capabilities, with expectations for year-over-year growth in retail unit sales [15][16] - Expected revenue and earnings growth rates for Carvana are 32.1% and over 100% respectively for the current year, with a 7.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [17] NRG Energy Inc. (NRG) - NRG Energy operates in the energy and home services sector, producing electricity from various sources and expanding operations through both organic and inorganic initiatives [18][19] - Expected revenue and earnings growth rates for NRG are 2.6% and 17% respectively for the current year, with a 2.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [20]