Three Things to Watch
- It’s a busy week for earnings with roughly 10% of the S&P 500 members scheduled to report. Earnings have continued to surprise on the upside and have been the driver of gains this year. Many of the major financial behemoths report this week, including JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs.
- The economic calendar is also busy with reports on inflation and retail sales. The Consumer Price Index (CPI) will be released on Tuesday, followed by the Producer Price Index (PPI) on Wednesday. Overall CPI is expected to fall slightly to 3.8%, reflecting the easing of oil prices, while core CPI is expected to remain unchanged at 2.9%, and well above the target of the U.S. Federal Reserve (Fed).
- The Fed will also be in focus with the Beige Book report due Wednesday, and new Fed President Kevin Warsh scheduled to deliver his semiannual monetary policy testimony before Congress on Tuesday and Wednesday.
Three Things to Know
- Nvidia, Micron, Broadcom and Applied Materials are now expected to generate a record $430 billion in combined free cash flow (FCF) over the next 12 months. That would be more than triple the FCF they generated just two years ago. (Source: The Kobeissi Letter)
- The difference between individual stock volatility in the S&P 500 and the S&P 500 Volatility Index (VIX) is up to a record 34 points. This gap has surged +19 points, or +127%, since March. Over this period, the individual stock volatility index has risen +9 points, to 49 points, the highest since March 2025. At the same time, the VIX has declined -16 points, to 15 points, the lowest since mid-January. In other words, the calm in the broader market is hiding unusually high stress across individual stocks. This comes as the concentration in mega-cap tech continues to keep index volatility artificially low. (Source: The Kobeissi Letter)
- Household equity holdings are up to a record $72 trillion. This is $18 trillion, or +33%, above its long-term trend from 2009 to 2019. Household stock ownership has more than doubled since 2020. Meanwhile, cash and cash equivalent holdings are up to $20 trillion, an all-time high. This exceeds the long-term trend by $5 trillion, or +33%. By comparison, households also own a record $11 trillion in debt securities, such as bonds, which is $2.2 trillion, or +25%, above trend. (Source: The Kobeissi Letter)
The above information reflects the current opinion of the author. It is based upon sources and
data believed to be accurate and reliable. Opinions and forward-looking statements expressed
are subject to change without notice. This information does not constitute a solicitation or an
offer to buy or sell any security mentioned.
5742396 – EXP: 07/31/2029