Inflation & Tariffs - Tariff price increases are expected to fully pass through, with inflation from goods peaking around the first quarter of next year [2][3] - Assuming no new tariff announcements, inflation from goods should decrease in the back half of next year [3] - The impact of individual tariffs can take quite a while to fully materialize due to shipping and other factors [2] - The expected peak inflation increase from tariffs is estimated to be a couple of tenths of a percentage point or less [3] - The full effect of announced tariffs is estimated to take about nine months [3] Monetary Policy & Leadership - The speaker states that discussions about a new Fed chairman do not hinder their current job or change their thinking [4]

Group 1: Pharmaceutical Industry - Pharmaceutical stocks are expected to face pressure due to recent tariff announcements, but European equities are showing resilience with futures up across the board [1] - The impact of tariffs may not be as severe as initially perceived, especially for pharmaceutical manufacturers with US manufacturing facilities, which are exempt from tariffs [2] - Companies like AstraZeneca have already established significant manufacturing bases in the US and have announced further expansion plans, positioning themselves favorably [3] Group 2: Gold Market - Gold is nearing its sixth consecutive weekly gain, having risen 40% this year, indicating strong demand despite signs of slowing momentum [5] - The recent tariff announcement highlights the fundamental uncertainty that continues to drive gold's appeal, with ongoing central bank purchases [7] - Better-than-expected GDP data from the US may negatively impact gold, but long-term factors supporting gold as a haven asset remain intact [6] Group 3: Bond Market - The bond market is under scrutiny, particularly in light of calls for increased government borrowing, which could create tension among traders [8] - Anticipation surrounds upcoming speeches, particularly from Reeves, which may influence market sentiment regarding tax policies and spending [9]

Trade Tariffs - The US government announces 100% tariff on pharmaceuticals [1] - The US government announces 50% tariff on kitchen cabinets [1] - The US government announces 50% tariff on bathroom vanities and associated products [1] - The US government announces 30% tariff on upholstered furniture [1] - The US government announces 25% tariff on heavy trucks [1]

Market Volatility and Valuation - Market valuations are high and volatility is low, which is unsustainable, especially heading into August and September [2] - Investors are discounting the potential impact of tariffs because they haven't seen the effects in the data yet [5] - A period of dislocation and increased volatility may be approaching [1] Tariff Impact and Trade - Over 40% of US imports are still subject to open questions regarding tariffs, including those from China, Canada, and Mexico [4] - The impact of tariffs is largely being shrugged off until it appears in the data [3] - Lower-than-expected tariff collections are fading away as exemptions and goods on the water decrease [7] Economic Outlook - Economic team believes moderate growth and firm inflation will persist for the next several quarters [5] - The expectation is that economic data will turn, potentially in September or October [7] Investment Strategy - Staying with current themes that are working is advisable [2] - Owning some protection is wise, especially considering the outperformance of certain names [3]

Market Overview & Tariffs - US stock futures are in the red as new tariff threats from President Trump target Mexico and the European Union, following a 35% tariff on Canadian goods [3][4] - The European Union is considering delaying tariffs on US exports but is prepared with over 24 billion in tariffs on US goods if a deal isn't reached [4][5] - The US dollar is slightly up against the euro, while European stocks are declining due to tariff concerns [5] Alternative Assets - Bitcoin surpassed 122,000, reaching a new all-time high, up about 10% in the past week and over 30% this year [6] - US stocks linked to crypto are seeing pre-market gains, with Michael Sailor Strategy up about 2%, and Coinbase and Robin Hood up over 1% [7] - Silver is up over 33% this year, surpassing gold's 27% rise, trading near $40 per ounce, driven by safe-haven demand and tighter supply [15] Economic Data & Earnings - Inflation reports from the US and Europe are in focus, with the US core CPI expected to show a 29% increase over the prior year in June [8] - Analysts expect S&P 500 earnings to have grown by just under 5% over the prior year during the second quarter, marking the slowest pace since Q4 2023 [9] - Large banks like JP Morgan and Bank of America are reporting earnings, with expectations of trading revenue gains attributed to record trading after tariff announcements [9][10][11][12] Electric Vehicles & Tax Credits - The federal EV tax credit of $7,500 for new vehicles and $4,000 for used vehicles is set to expire on September 30th [38] - Chinese EV companies are releasing more electric SUVs, potentially weakening Tesla's position in the Chinese market [35][36] - Tesla is down about 08% and faces scrutiny due to Elon Musk's multiple leadership roles and the company's valuation being based on future technologies like robo taxis and humanoid robots [44][46][47] Federal Reserve & Interest Rates - Markets are pricing in just a 7% chance of a Fed rate cut in July, with Goldman Sachs expecting the first rate cut in September [53][54] - Some strategists warn the Fed may hold steady due to lingering inflation risks and tariff uncertainty, potentially pushing rate cuts to November or December [54][57] S&P 500 Outlook - RBC Capital Markets raised its year-end S&P 500 target to 6,250 from 5,730, reflecting a roughly flat return for the rest of the year [61] - Strategists are closely watching the tariff situation, with uncertainty surrounding its resolution potentially leading to market chop [63]

Tariff Landscape & Trade Policy - The US administration is considering raising tariffs on Canada to 35%, up from the current 25%, though exemptions for USMCA-compliant goods and a lower 10% tariff for energy are likely to remain [2] - The US President is considering raising the universal baseline tariff from 10% to 15% or even 20%, potentially increasing the cost of all imported goods by at least 15% [4] - The US has postponed the July 9th deadline for reciprocal tariffs but has introduced new tariff threats for Canada and Brazil, including a potential 50% tariff on copper and a possible 200% tariff on pharmaceuticals [5][6] - The US President believes that uncertainty is the best negotiating leverage and is keeping it up [9] - A potential doubling of the universal baseline tariff to 20% on all imports could bring the US back to pre-post-war economy levels, impacting the US services economy and increasing the cost of goods [13][14] Geopolitical & Company Strategy - Canada is strengthening its partnerships throughout the world, signaling a shift in trade relations amid tariff disputes [3] - Nvidia's CEO Jensen Huang's visit to the White House and subsequent trip to China amid tariff discussions and export controls suggest potential negotiations for lifting export controls, which would benefit Nvidia [15][16][17][18] - The US President's rhetoric towards China has become more upbeat, with potential trade negotiations on the horizon [17]

Core Insights - Rigetti Computing is gaining attention in the quantum computing market, focusing on designing and manufacturing quantum computing units and systems, as well as application development [1] - The quantum computing market could reach $170 billion by 2040, with Rigetti's share price increasing by 588% over the past year, despite the company not being profitable and experiencing a 32% decline in sales to $2.3 million in Q4 [2] - Rigetti's current price-to-sales ratio stands at 147, indicating a high valuation amidst losses and declining sales, suggesting investors may want to consider other opportunities [3] Company Summaries Taiwan Semiconductor (TSMC) - TSMC is a key player in the AI sector, manufacturing approximately 90% of advanced processors and partnering with AI leaders like Nvidia [4] - The surge in AI-related spending has led to TSMC's revenue increasing by 42% to $25.5 billion, with earnings per ADR rising 60% to $2.12 in Q1 [5] - Despite potential uncertainties from tariff announcements, TSMC is well-positioned in AI chipmaking, with tech companies expected to invest around $2 trillion in AI data centers in the coming years [7] Microsoft - Microsoft has established a strong foothold in AI through its investment in OpenAI and the integration of AI capabilities into its services, positioning itself well in the AI software market [8] - The company is the second-largest public cloud provider, with a market share of 21%, and has significantly narrowed the gap with Amazon [9] - Azure's sales grew by 31% in Q2, and Goldman Sachs projects AI cloud computing sales could reach $2 trillion by 2030, with Microsoft's annual AI revenue run rate now at $13 billion, reflecting a 175% year-over-year increase [10][11]

Company Overview - Luxury furniture company RH has seen its shares drop over 60% year to date, largely due to external factors such as tariff announcements and market volatility [1][2] - The company is currently facing challenges in a tough housing market, described as the worst in almost 50 years, which is expected to continue impacting operations [2] Market Conditions - The home furnishing market experienced a surge in demand during COVID-19, but rising interest rates have led to decreased home movement and remodeling activities, negatively affecting furniture sales [3] - The company is navigating a higher-risk environment due to tariffs, market volatility, and inflation [2] Expansion Strategy - RH is aggressively expanding in Europe, with existing galleries in England, Germany, Spain, and Belgium, and plans to open new locations in London and Paris [4] - The company invests heavily in its gallery locations, which are often in prestigious areas and designed to make a statement [5] Financial Performance - In the latest fiscal fourth quarter, RH reported a nearly 10% increase in revenue to $812 million, with adjusted EPS more than doubling to $1.58, although these figures missed analyst expectations [8] - Gross margins improved by 120 basis points to 44.7%, but SG&A expenses rose 14%, accounting for 36% of sales [8] Inventory and Production - Merchandise inventories increased by 35% to $1 billion, raising concerns as inventory growth outpaced sales growth, although the company views this as a strategic advantage in light of tariffs [9] - RH aims to have 14% of its total production sourced from the U.S. by year-end to mitigate tariff impacts [7] Valuation and Risks - The company trades at a forward P/E ratio of 14 times current fiscal year estimates, which is considered inexpensive given expected revenue growth [10] - However, potential tariff impacts and economic downturns could pressure earnings, especially given the company's existing leverage of $2.6 billion and negative free cash flow last year [6][11][12]