The Morning Call---The outlook for inflation

 

The Morning Call

 

7/29/26

 

The Market

         

    Technical

 

            Friday in the charts.

https://www.zerohedge.com/markets/semis-slammed-momo-mullered-ai-credit-cracks-black-gold-bond-yields-drop-deal-hopes?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NjAyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTI3MzU5NSwiZXhwIjoxNzg3ODY1NTk1LCJhdWQiOiJ6aC1naWZ0In0.Z1qcKJVo_43dHLg_MryNln7SMvak9DJB3uQHjfYXsYQ

 

            Friday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            CTAs are sellers in every scenario next week.

https://www.zerohedge.com/markets/ctas-are-sellers-every-scenario-next-week-and-massive-185-billion-if-stocks-drop-next-month?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NTc1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTI2NzE2MCwiZXhwIjoxNzg3ODU5MTYwLCJhdWQiOiJ6aC1naWZ0In0.73gN0dD6fPXbsDdFW2MRk-rEqOZQ0SJUNRRQ3ztpSWA

           

            Green shoots? (from the same group that published the above)

https://www.zerohedge.com/the-market-ear/first-green-shoots?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NjA1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTI2NzUyNSwiZXhwIjoxNzg3ODU5NTI1LCJhdWQiOiJ6aC1naWZ0In0.xbt37eCCaHgT_YLSqeJ4sb6WGJ9a5_ZTHOA6VVgj-Mc

 

            Don’t go chasing ‘waterfall’ formations.

https://www.zerohedge.com/markets/dont-go-chasing-waterfalls-btig-warns-not-spot-press-shorts-semis?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NTgxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTI2Nzg3MiwiZXhwIjoxNzg3ODU5ODcyLCJhdWQiOiJ6aC1naWZ0In0.QcFtjtQ5P-ibeUE5HPxufVNLL4xyyTUOwzKjD7syH3o

 

            Goldman’s view.

https://www.zerohedge.com/markets/july-leaving-some-lasting-scars-goldman-flows-guru-warns-leverage-works-both-ways?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NTY3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTI2ODIwMywiZXhwIjoxNzg3ODYwMjAzLCJhdWQiOiJ6aC1naWZ0In0.5a_bCfVYu1up7IERiJ1fN-g0JJjvPSYj7lEZqrERuR0

 

Wednesday mooring setup: US equity futures are higher, overlooking both tech-led declines in Asia which saw the Kospi crash as much as 13% and trigger a second consecutive 20 minute market-wide halt, and the 5% jump in oil prices which has pushed Brent over $88. As of 7:30am ET,  S&P 500 and Nasdaq 100 contracts are each up 0.2%, reversing sharp overnight losses, with tech flipping from laggard to leader and reversing (for now) a chip rout overnight which saw SK Hynix plunge 7.6% after tumbling 17% the session prior. With hyperscaler earnings today (MSFT and META), JPMorgan's trading desk - which has incorrectly called the bottom in the chip rout almost every day in the past month - asks if "perhaps we finally establish a floor within the Tech trade."  Semis are higher pre-market with Mag7 mixed. Overnight, Korea / Semis took another leg lower with JPM’s Mixo Das seeing the levered ETF unwind in its 9th inning (90% complete). Defensives are leading Cyclicals (ex-Tech & Energy) with the Energy bid returning on news of renewed attacks in the Middle East. In fact, oil is trading 5% higher at session highs (above $83 for WTI and above $88 for Brent) which is pushing bond yields up 1-2bp as the curve flattens, USD is weaker. Today's macro focus is on the Fed (read out preview here). Most banks (but not Citadel) expect the Fed to hold with two or more hawkish dissents; the market is pricing a 32% chance of a hike.

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 6.4% while purchase applications were down 3.6%.

 

Month to date retail chain store sales were up 8.3% versus up 7.8% in the prior week.

 

The May Case Shiller home price index was up 0.9% versus forecasts of up 0.6%.

https://bonddad.blogspot.com/2026/07/is-disinflation-in-repeat-home-sales.html

 

The July consumer confidence index came in at 90.8 versus expectations of 92.3.

 

The July Richmond Fed manufacturing index was 5 versus consensus of 10.

 

                        International

 

 

                        Other

 

                          Reducing employment growth.

                          https://econbrowser.com/archives/2026/07/reducing-employment-growth

 

            Overnight News

 

The Senate voted 86-12 to advance a bill that would empower Trump to impose tariffs on major buyers of Russian energy, as well as Iran, with a final vote possible later this week.

 

Wall Street banks have demanded more collateral from hedge funds in recent weeks as a rout in AI stocks accelerates and triggers heavy losses across several popular strategies. 

           

            Iran

 

              Overnight news.

                          https://www.zerohedge.com/geopolitical/war-pause-holds-trump-vows-destroy-pickaxe-mountain-if-no-deal-oman-pushes-hormuz

 

            Monetary Policy

 

Kevin Warsh wanted a ‘good family fight’ over monetary policy.  He is getting one.

              https://www.wsj.com/economy/central-banking/kevin-warsh-fed-chair-first-two-months-cf5e0ddc?st=vrFhK7&reflink=desktopwebshare_permalink

 

            Inflation

 

The outlook for inflation---another great read from Hoisington Investment Management.

              https://www.advisorperspectives.com/commentaries/2026/07/28/quarterly-review-outlook-second-quarter-2026

 

              A somewhat different view.

              https://www.capitalspectator.com/iran-tensions-ease-but-markets-still-looking-for-fed-rate-hikes/

 

           

            AI

 

              Big tech credit risks rise as AI spending soars.

              https://giftarticle.ft.com/giftarticle/actions/redeem/e358a9be-6a95-4109-a51a-6eeec6e3b49a

 

              Wall Street’s debt monster wants another quarter trillion.

  https://www.zerohedge.com/the-market-ear/aamon-hungry-again-wall-streets-new-debt-monster-wants-another-quarter-trillion?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NjYzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTMzMDA0NywiZXhwIjoxNzg3OTIyMDQ3LCJhdWQiOiJ6aC1naWZ0In0.wZLR1z72AFY1Rj461LuTHPjQFOU3eBHqoYtFLdfwmTY

 

              The AI hangover has arrived.

  https://www.zerohedge.com/the-market-ear/ai-hangover-has-arrived?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTE5NjQ4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NTMyOTY5NiwiZXhwIjoxNzg3OTIxNjk2LCJhdWQiOiJ6aC1naWZ0In0.wBlxxfclqQoNLg0D39iEMXOa6gfnLfrjAJIGMREh1ug

 

 

            Tariffs

 

              Tariffs didn’t improve the deficit but did increase consumer costs.

              https://mishtalk.com/economics/trumps-tariffs-didnt-improve-the-deficit-but-did-increase-consumer-costs/

 

     Investing

 

            REITs, the forgotten asset.

            https://alhambrapartners.com/weekly-market-pulse-the-forgotten-asset/?src=news

 

            On the other hand…….

            https://www.bespokepremium.com/interactive/posts/think-big-blog/real-estates-penthouse-view

 

            Stocks finally have some competition.

            https://trendlabs.com/stocks-finally-have-some-competition/

 

            Are US Treasuries still a safe asset?

            https://www.advisorperspectives.com/commentaries/2026/07/28/us-treasuries-still-safe-asset

 

            Margin math tests the earnings story.

            https://www.advisorperspectives.com/commentaries/2026/07/28/margin-math-tests-earnings-story

           

            What 125 years of (performance) data tells us.

            https://behindthebalancesheet.substack.com/p/what-125-years-of-data-really-tell

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Four retirement costs that could blindside you.

                        https://retire.ly/2026/07/21/4-retirement-costs-that-could-blindside-even-the-best-prepared-savers/?utm_source=talkmarkets&utm_medium=talkmarkets

 

 

 

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