JPM US Market Intelligence Afternoon Briefing Aug 10

IDEAS & INSIGHTS – IN BRIEF • MKT UPDATES – US/Iran, JPY and Tech flow updates from JPM Trading desk. • DESK COMMENTARY – Trading desk views on Financials (end of the quarter summary) and Mag 7 headlines. • US MKT INTEL: CPI SCENARIO ANALYSIS – Feroli sees Headline MoM printing +0.12% and Core MoM printing +0.22%. This equates to 3.4% YoY for Headline and 2.5% YoY for Core. • US MKT INTEL VIEW – We update the Bull / Bear debate and are Tactically Bullish and we update the Monetization Menu

AFTERNOON UPDATES (NEWS LINKS) • SPX -0.1%, NDX -0.3%, RTY -0.6%. WTI at $82.16, NatGas -64bps to $2.78, UK NatGas +1013bps to £1.4972, Gold +3bps to $4,392, Silver +3bps to $65.76, 10Y @ 4.707%, and VIX @ 15.46. • US: Stocks closed lower; RTY lagged. Price actions was slightly more negative than the index level with 54% of the stocks closed lower in the SPX universe. Mag 7 performance diverged further: MSFT, AMZN and GOOGL outperformed, while NVDA and AAPL lagged. Energy and Software are among the top performing baskets. Reopening trades (Airline and Housing) underperformed given the 4.8% surge in oil prices. • EU/UK: Major markets closed mixed; SX5E outperformed and UK lagged. Stoxx 600 closed 3bp higher after reaching record high on Friday. Today’s price actions were largely muted across the board. Notable outperformers were largely linked to the 4% increase in Bent crude prices: Oil Sensitive Energy +1.9%, ME Escalation Longs +1.5% and Defence + 0.6%. UKX -0.4%, SX5E +0.2%, SXXP +0.0%, DAX +0.0%.

CATALYSTS TOMORROW (FULL WEEK CALENDAR) • US MACRO DATA TOMORROW: NFIB Small Business Optimism at 6am ET. ADP Weekly Employment Change at 8.15am ET. Existing Home Sales at 10am ET.

• US EARNINGS TOMORROW: CAVA, CRWV, EROC, IMXI, KPTI, LEGN, LITE, NN, QNT, SMCI, USAR, VG • GLOBAL MACRO DATA TOMORROW: (Japan) Money Stock M2 and Money Stock M3 at 7:50pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

TODAY • US/IRAN WEEKEND HEADLINES (BRENDAN HENRICI) – Oil & energy products are opening this week with a modest bid following a (seemingly) escalatory weekend. The 1% move in the prompt this morning chases a weekend where 1) a deal, previously expected for Wednesday, remains elusive 2) attacks—both in chokepoints and on land on infrastructure—continued if not escalated and 3) Iran demands with respect to 1) not only are far apart from the US, the divide appears to be growing wider. On the attacks, over the weekend the Houthis attacked Saudi Aramco's Jazan refinery (~400kpd) and the UAE accused Iran of striking an ADNOC tanker with a missile as it crossed the Strait. Putting the latter attacks in context, ADNOC has reportedly experienced 15 attacks on its vessels since the war began including 3 in the past week. Elsewhere, a US official has told Axios that oil is exiting the strait at night at a rate of 8mmbd, a number that, if accurate, is well ahead of even the most optimistic of estimates near 8mmbd. o ENERGY COMMENTS (BRENDAN HENRICI) – Overall OFS is up 2z today which is the largest move since February (!). Our smid enegry basket is also up 2.25z today which is that baskets largest advance since February as well. Feels like an energy-beta exposure chase? Not a lot of folks see much rationale for this in the macro — sure oil up 3% but E&Ps have hardly traded with a beta >1 on oil up days the last few months so this is an anamoly with them up 5-6%. The headlines this weekend seemed to shift hawkish (oil positive) on the margin with respect to attacks & traffic but there were equally bearish headlines with the WSJ suggesting the Trump administration may take a softer line on the nuclear ask in efforts to get the strait open. Would be curious to hear what folks are pointing to for the rally in energy at large out there because it certainly deviates from what we have become accustomed to (even on oil up days). • USD/JPY – USD/JPY rose to 159.25 today. Recall that the US-Japan intervention strengthened the JPY from 163.85 to the lowest of 157.18, we have started to see the reversal of this price actions. The next set of catalysts for USD is Wednesday’s CPI as increasing in Fed hike