Inflation In The U.S.
1. U.S. CPI rose 0.3% June, up 2.7% year-over-year. Relatively in line with what economists were predicting. Though, the rate has increased a little over the past few months. So that’s more concerning… remember trends matter vs just one data set.
June was expected to be the month where tariff related prices would start to show up. So far, the response is slightly subdued, but tariffs madness is ongoing. It will likely impact inflation… hard to see how it won’t. But, time will tell more.
Looking at inflation, and employment; Fed really doesn’t have any reason to cut.
Inflation In Canada
2. Canadian headline inflation for June came in at 1.9% year-over-year, little higher than 1.7% in May.
Prices for durable goods increased 2.7% in June on year-over-year basis after increasing 2.0% in May. This in interesting to me, I wonder if tariff related panic buying happening in Canada? Clothing, footwear, furniture and vehicle prices increased. This is something that lagged for a while.
Since Bank of Canada’s mandate is inflation, will it cut rates end of July? It doesn’t have many reasons to if we look at the headline figures.
Earnings Season Has Begun
3. Earnings season has begun with JPMorgan beating expectation and Jamie Dimon saying U.S. economy remains resilient.
In coming weeks, tons more companies will be reporting.
Important to note here: during earnings season, your stock specific risk goes up. So, know what you own and why.
For Q2 2025, year-over-year earnings growth rate for the S&P 500 is expected to be 4.8%. If this is the final number, it will be lowest earnings growth reported by the index since third quarter of 2023 (Factset).
Bitcoin Can’t Hold It Together?
4. Bitcoin jumped to little over $123,000 yesterday, but now tracing back a little bit.
Down to $117,000 as I write this.
What changed? Is it not crypto week anymore?
I have said this before, and I think its worth saying again; when everyone is talking about something, know that there are people just sitting and waiting to sell as fast as they can. People sell into strength… not just bitcoin, but any other asset really.
Is the move in bitcoin over? It would have to now break above $123,000 to attract more buyers.
Once again: know what you own. There is a lot of garbage in the crypto world.
Gold, Oil, Yields & VIX
5. Gold: consolidating. Needs to break and close above $3,450 to get excited buyers.
Oil: “rally” got sold. Can’t stress this enough: you need some major event for price to spike to above $80 at this point.
Bonds: yields on U.S. 10Y down on inflation data but still remain elevated.
VIX: continues to trade below 20. Summer rally to continue for a while? Let’s check stocks back again in mid-August?