JPM US Market Intelligence | Morning Briefing

• MKT THOUGHTS – views on yesterday’s moves plus color on Bullish Brazil call, Fedspeak, Tech trade, and US geopolitics

• US MKT INTEL VIEW – Tactically Cautious / Neutral with an updated Monetization Menu. We discuss what would make us Bullish vs. Bearish.

JPM MARKET INTEL MORNING UPDATES

• SPX -0.0%, NDX -0.0%, RTY +0.1%. WTI -114bps at $94.69, NatGas -4bps to $2.84, UK NatGas -269bps to £1.7671, Gold -55bps to $4,320, Silver -108bps to $65.32, 10Y @ 4.939%, and VIX @ 14.84.

• US: Futures are flat following yesterday’s strong, positive performance despite energy prices and yields being lower for a second consecutive day. USD is flat while the entire cmdty complex is lower, though Base Metals are a bid. These moves likely reflect growing optimism around a diplomatic solution in the Middle East and improved US / China relations, which combined will support AI and lower energy prices, and potentially lower tariff rates. Within Eqys, Semis are down ~60bp after a 5-day run that added 11.2%. Memory names are weaker as Mag7 and Software remain bid. Both Discretionary and Staples are higher; Airlines and Def are leading Industrials and Utils are poised to outperform. Today’s macro data focus is on ADP’s weekly number, regional Fed activity indicators, and another Fedspeaker.

• EU/UK: Major markets are all higher ex-Italy with regional bond yields lower ex-France. Top themes include AI, Software, and Defense plays with Energy, Gold, and MidEast Escalation Longs lagging. Further, Beta / Quality are leading with Size / Value lagging; Cyclicals over Defensives. APAC had another positive session led by Japan which appears, tactically, to be the best secular play in the region. UKX +0.1%, SX5E +0.2%, SXXP +0.3%, DAX +0.1%. CSI +0.1%, HSI +0.2%, NKY +1.4%, ASX +0.3%, KOSPI +0.1%.

• US MACRO DATA: ADP Weekly Employment Change at 8.15am ET. Philly Fed Non- Mfg Activity at 8.30am ET. Richmond Fed Mfg Index and Richmond Fed Business Conditions at 10am ET. Fed’s Williams Speaks at 10.05am ET.

• GLOBAL MACRO DATA: (UK) Public Finances (PSNCR), Public Sector Net Borrowing, and PSNB ex Banking Groups at 2am ET. (Eurozone) Consumer Confidence at 10am ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

Yesterday’s session seemed to be the market expressing a view that (i) a diplomatic solution in the Middle East is likely, potentially as soon as this week; (ii) AI fears are overblown and that any regulation will not be a headwind to capex, implementation, or ROI; and (iii) the Fed is hiking for the right reasons which speaks to sector selection within Equities rather than an asset allocation decision that would underweight stocks. Despite the holiday, volumes were strong suggesting that we are at the beginning of the trend with NDX setting a new all-time high and the SPX 44bp away. Let’s see if these conditions persist into/through the various Trump meetings this week with the key being a potential meeting with Iranian leadership, which could present an off-ramp if the sides decide to talk especially after Bessent’s warnings on removing countries that assist Iran from the USD-denominated economy.