JPM JPM US Market Intell

IDEAS & INSIGHTS – IN BRIEF • US MKT INTEL VIEW – Tactically Bullish and we update the Monetization Menu • WHAT ARE WE WATCHING FROM HERE? Given the choppiness, we flag some things that we will be watching to confirm / refute market direction across bonds, credit, factors, foreign markets, sectors. Plus, we include some near-term catalysts that we are monitoring. • ADDITIONAL THOUGHTS – earnings, economic update, Fed thoughts, and an US / Iran update • POSITIONING INTELLIGENCE – Prime Time / Monthly Wrap | HF Performance Drops Amidst Strong De-Grossing; Set-up Cleaner Despite LT Positioning Risks • NOTES FROM RATES TRADING – Joe Mazzurco updates us on desk views • MACRO CORPORATE SPOTLIGHT – JPM Research addresses issues for corporate treasurers for 26H2

JPM MARKET INTEL MORNING UPDATES • SPX +0.5%, NDX +0.5%, RTY +0.6%. WTI -569bps at $79.85, NatGas +102bps to $2.78, UK NatGas -19bps to £1.4400, Gold +16bps to $4,053, Silver +102bps to $58.18, 10Y @ 4.688%, and VIX @ 16.06. • US: Futures are higher with both NDX and RTY outperforming as Trump points to a deal / discussions which is pushing energy prices and bond yields lower as the USD depreciates. WTI is under $80/bbl dragging the Energy complex lower as we see this move boosting both Base and Precious Metals with Ags lower. In Eqys, the Tech tape is being led higher by Mag7 with Semis lagging. Energy is lower with the remaining sectors seeing a bid pre-mkt as the lower oil / bond yields are creating a an ‘Everything Rally’. Though Kospi was down overnight, EWY is +1% pre-mkt. Today’s macro data focus is on ISM with an eye towards Friday’s NFP print. • EU/UK: Major markets are all higher as the region see a stronger rally in bonds, bull steepening most regional curves. Germany / France / MCX are leading with UK lagging. Luxury and Software are among the top performing D1 baskets with Energy and Semis among the top laggards. Both legs of LT Momentum are being unwound whereas in the US Momentum is higher pre-mkt. Beta / Value are

leading, ResVol / Momentum are lagging; Cyclicals over Defensives. UKX -0.1%, SX5E +1.0%, SXXP +0.4%, DAX +1.4%. CSI -1.0%, HSI +0.5%, NKY -0.9%, ASX +0.5%, KOSPI -5.1%.

CATALYSTS TODAY (WEEK AHEAD) • US MACRO DATA: PMI-Mfg (Revision) at 9.45am ET. ISM-Mfg (New Orders / Employment / Prices Paid) and Construction Spending at 10am ET. Total Vehicle Sales. • US EARNINGS:

o BMO: BRK/A, ECHO, KRYS, MAR, TSN, TWST

o AMC: ADTN, AEIS, AESI, BWXT, CLX, FANG, OKE, ON, PLTR, POWL, SBAC, SNAP, STRL, TKO, UCTT, VRTX, WHR, WMB

• GLOBAL MACRO DATA: [SUNDAY / AUG 2] – (Japan) PMIs (Revision) at 8.30pm ET. (China) RatingDog PMIs at 9.45pm ET. AUG 3 – (France) PMIs (Revision) at 3.50am ET. (Germany) PMIs (Revision) at 3.55am ET. (Eurozone) PMIs (Revision) at 4am ET. (UK) PMIs (Revision) at 4.30am ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE Last week, the SPX was +1.1% as the AI / Semis / Tech trade appears to have climbed the wall of worry with DX outperforming SPX and KOSPI exploding higher. SOX was down 4.3% on the week but retraced ~62% of its losses on Thursday before seeing Friday’s gain truncated as yields continued to rise. Fed credibility and higher bond yields are a new risk. Positioning is cleaner, though US Semis did not experience a flush with positioning dipping to 80th percentile. A few thoughts on markets: • The 2 biggest news items were (i) another deal being reached in the Middle East as Trumps pauses attacks and (ii) FX intervention to the support the Yen. In both cases, there may be limited impact on US markets as bond yields may not reset lower in response to weaker oil prices and Fed credibility issues may not dissipate quickly. • While Warsh’s press conference introduced more vol and credibility issues, we agree with his view that the US economy remain on solid footing with resilient consumer and corporate sectors. Further, we think there are upside risks to consumption forecasts based on a ‘no hire / no fire’ labor market, positive wage growth, and historically strong cash levels (checking + savings + consumer MMFs). On cash levels, nominally, the aggregate consumer has set a new record 7 consecutive quarters. In real terms, the top 4 income…