In a market captivated by the relentless AI-powered rally in US equities, few on Wall Street seem to mind that only a handful of companies are leading the charge https://t.co/qKlse3vyXN ...

After sitting on the sidelines for most of the record-breaking run in US equities, small-cap stocks have finally joined in and ended the drought that started during the pandemic https://t.co/BaM0gGvRM8 ...

Inflation & Monetary Policy - The market is trying to figure out if PPI and CPI data will be market movers after a soft jobs report and revisions signaling job market weakness [1] - The Fed faces a challenging scenario if CPI data comes in higher than expected, especially with potential goods inflation pressure from tariffs [2] - Last month's CPI data benefited from significant disinflation in one sector; stripping that out reveals a more unsettling number [2][3] - A 29% headline CPI seemed fine for PCE according to JPA Pal, and the focus should be on the month-on-month CPI number to see the impact of tariffs [4][5] - The consensus for the month-on-month CPI number is 03%, and a higher number would be a concern [5][6] AI & Tech Market - Oracle shares are up about 29% with strong numbers and forward guidance, confirming the AI trade is still alive [6] - Sentiment on AI swings regularly, but the firm remains a believer with overweights in US equities and the NASDAQ, driven by AI [7][8] - Forward P/Es for the NASDAQ are a bit above average, but earnings expectations are not rising much more quickly than normal [9][10] - The current earnings trend for tech stocks is considered sustainable, and the multiple is not seen as too high [10]

Market Sensitivity to Tariffs - Emerging and frontier markets are sensitive to new tariff announcements, with Japan facing domestic pressure due to an upcoming election [1][2] - US is a crucial market for Asian countries, limiting their options in trade negotiations [3] - The US President hopes ongoing negotiations will be successful [4] Impact of a Weaker Dollar - A weaker dollar negatively impacts foreign investors with $17 trillion invested in US equities, particularly those denominated in Euro, Yen, Taiwanese dollar, or Singapore dollar [6] - From April 2011 to two years prior to the discussion, the US dollar index increased by 55%, but has since fallen by 20% [5] - The dollar's depreciation is causing losses for foreign investors, even if the S&P 500 is performing well [6] - Some money is flowing out of US equities from non-US investors and back into growth stocks, especially in Asia's tech sector [7] Potential Winners and Strategies - The US President aims to bring jobs back to America through tariffs [8] - Asian automakers have already moved some production to the US [9] - South Korean semiconductor producer SK Hynix might build a factory in the US, similar to TSMC [9] - The US is the largest exporter of services globally, requiring caution in trade actions to avoid affecting US companies selling services like software, finance, and intellectual property [10] - The current trade war is focused on goods, and the US President is navigating to prevent it from expanding into a services trade war [11]

Stocks mostly higher today with the S&P 500 and NASDAQ closing at records as President Trump announced the framework of a trade deal with Vietnam. The gains coming despite some weak jobs data. ADP private payrolls unexpectedly fell by 13,000 in June.The labor department jobs report comes out tomorrow morning. For more on what it all means for markets and the Fed, let's bring in Jack Jennis, lead portfolio strategist at Natixus. Jack, great to see you.Thanks for having me back. Where do you stand on on where ...

Market Trends - Bank of America's clients reduced exposure to US equities [1] - Clients withdrew money from US equities at the fastest pace in 10 weeks [1] - The S&P 500 capped its best quarter since 2023 to end June at a record [1]

DeFi & Traditional Finance Convergence - Potential integration of US equities into DeFi platforms like Meteora for LP farming [1] - Questioning the possibility of earning fees through liquidity provision (LP) with US equities on DeFi platforms [1]

Market Overview & Geopolitical Risk - Equity investors are largely comfortable ignoring geopolitical risks unless oil prices significantly increase [2] - The market recovery suggests reassurance that equity investors can overlook geopolitical risks if oil prices remain stable [2] - Geopolitical risks are primarily assessed through the channel of oil prices [3] Investment Strategy & Positioning - The firm recommends a long position in high-quality US equities due to earnings growth, high valuations, and headline risks [4][5] - A rotation from growth stocks into quality stocks is advised due to changes in the interest rate market [6] - Institutional investors had significantly recovered their positioning, though slightly less heavy than in late February [8] - Positioning is considered pretty full, close to levels seen in mid to late February, but not underweight [9] Sector Analysis - Energy sector is generally underowned and not considered a core part of quality stocks, but potential persistence of geopolitical risks may force positioning [10][12] - Large-cap banks are favored due to a seemingly good operating environment, while regional banks are considered tricky due to lack of sponsorship for lower quality trades [18] Macroeconomic Factors - A weaker dollar is a tailwind but could become a concern if it becomes too volatile, potentially signaling the end of US exceptionalism [13] - Foreign investors are hedging more of their dollar risk [15] - Strong Q1 earnings, particularly from Hyperscalers doubling down on capital expenditure, have reinforced the AI trade and attracted investors back to US equities [13][14]