JPM JPM US Market Intell

IDEAS & INSIGHTS – IN BRIEF • MKT UPDATES – Thoughts on US/Iran updates, tech and broadening • DESK COMMENTARY – Trading desk views on single stock futures and tech. • DAILY EARNINGS MACRO READ-THROUGH – AXP flagged the strongest consumer spending since 2018 Q1; interesting comments on AI PnL tolerance. • US MKT INTEL VIEW – Tactically Bullish and we update the Monetization Menu • EXTEL FOR FIXED-INCOME – Extel (formerly II) voting for Fixed-Income has kicked off and we would appreciate you supporting our colleagues as they look to maintain their #1 ranking in Fixed-Income Research. Please vote here. Our Analyst roster is here. • US MKT INTEL’S VIEWS & THEMES note for July is here.

AFTERNOON UPDATES (NEWS LINKS) • SPX +0.0%, NDX -0.3%, RTY +0.6%. WTI -750bps at $82.61, NatGas -362bps to $2.77, UK NatGas -866bps to £1.4076, Gold +1bps to $4,077, Silver 0bps to $58.37, 10Y @ 4.649%, and VIX @ 18.67. • US: Stocks closed mixed; RTY and equal-weighted SPX led, while Tech lagged. The weekend headlines on both the US and Iran pausing strikes drove a sharp decline in oil (WTI -7.5%), with the tone from Trump’s interview today remaining positive (“very friendly negotiations”). The decline in oil supported the broadening and reopening trades: Retail +2.8% and Airlines +2.5%. On the other hand, semiconductor weakness offset much of the gains from other parts of the market: SOX closed today with a 2.2% loss, though reversing an intraday low of 6%. Software outperformed SOX by 5.5% today, a 1.2 standard deviation move. • EU/UK: Major markets closed higher, with Germany leading. Similar to the US, semiconductor weakness and broadening were the core themes today. ASML fell 8.5% on a report that a Chinese state-backed firm has begun producing chipmaking machines. On the other hand, Software, Momentum Short, EU Defence, and Consumer Recovery were among the top- performing baskets. UKX +0.4%, SX5E +0.0%, SXXP +0.0%, DAX +1.0%.

CATALYSTS TOMORROW (FULL WEEK CALENDAR) • US MACRO DATA TOMORROW: Durable Goods / Cap Goods at 8.30am ET. Dallas Fed at 10.30am ET. • US EARNINGS TOMORROW: ACHC, AMT, BA, BE, CAKE, CAR, CARR, CDNS, CMS, CNC, CNP, CSGP, CZR, DINO, DYN, ECL, ENPH, EXE, F, GLW, HLT, HUBB, INCY, IQV, ITW, IVZ, JBLU, KLAC, KO, MDLZ, MIR, OI, OMC, PCAR, RCL, RGEN, RITM, SHW, SPGI, STX, SWKS, TER, TRU, TXT, UPS, V, VLTO, VRNS, XPRO, XYL • GLOBAL MACRO DATA TOMORROW: Denmark / Ireland / Spain – Retail Sales. France – Consumer Confidence

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

TODAY • US/IRAN UPDATES – The tension between the US and Iran eased over the weekend as both countries have been pausing strikes since Friday after 13 nights of intensifying air strikes. WTI crude declined close to $84 at market open today (from ~$90 last Friday). Overall, we did not receive much incremental update on US/Iran today. Some headlines since market open include: (i) Trump today said that he is having “very deep talks” / “very friendly negotiations”; (ii) he also said the US will “go back to very strong military actions” if the negotiation does not work out. Brent and WTI declined 9.3% and 7.5% today, respectively. o Brent is now at $87.80, $0.8 above Natasha’s fair value model. However, it is worth noting that the base case of her fair value model assumes “that the Strait of Hormuz would have begun reopening on June 1, with the tanker traffic, including re-routing, recovering to roughly 73%” (here), and the weekend headlines certainly point to the situation as being far from the June 1 reopening scenario. • BROADENING – The decline in oil and weekend geopolitical developments supported the reopening/broadening trade today: Retail +2.8%, Potential Squeeze +2.8% (this was also partially supported by the Software rally), Airlines +2.5%, and Staples +1.8% were among the top-performing baskets. SPW and RTY added 70bp and 60bp, respectively. • DAILY EARNINGS MACRO READ-THROUGH SUMMARY – Corporate comments continued to reflect healthy consumer and demand, with the strongest comments coming from American Express, saying that this is their strongest level of consumer spending growth since 2018 Q1 (+11%). Another interesting comment I would highlight is also from…