JPM US Market Intelligence | Morning Briefing: Futs higher; APAC Tech improves; US Retail returns; CPI post mortem; Stay Bullish

• MKT THOUGHTS – post-CPI tactical setup, CPI, Korea, Macro Data, and US / Iran

• CPI POST-MORTEM – Thoughts / views from around the firm

• US MKT INTEL VIEW – We update the Bull / Bear debate and are Tactically Bullish and we update the Monetization Menu

JPM MARKET INTEL MORNING UPDATES

• SPX +0.2%, NDX +0.0%, RTY +0.2%. WTI -187bps at $81.71, NatGas -82bps to $2.78, UK NatGas -344bps to £1.4475, Gold -62bps to $4,381, Silver -109bps to $64.61, 10Y @ 4.670%, and VIX @ 14.65.

• US: Futures are higher with Tech flat; there was an overnight rally in APAC with KOSPI re- entering a bull market and positioning is 78 th percentile so room to run higher but the lack of levered ETF / derivs participants may mean a slower pace. Gokul flags APAC Semis revenue +134% YoY in June vs. +128% YoY in May; the 10 th consecutive month of appreciation and a new record higher in growth. Bond yields are 2-4bp lower as the market lower expectations for a Sept rate hike. USD is down a touch. Cmdtys are weaker, dragged by Energy with both Base and Precious seeing declines. In Eqys, Semis are flat, Memory is lower, with Mag7 / Software trading up. Cyclicals and Defensives are trading higher with weakness in Energy / Materials; AI theme remains bid. Keep an eye on the Retail investor as our flows data show an uptick from 4%-ile to 64%-ile but with a shift away from Tech to macro themes, e.g. gold.

• EU/UK: Major markets are all higher led by Spain with UK the only major in the red. Regional yields are lower as curves bull steepen. Top D1 baskets include Tariffs, Defense, Software, and Freight Rate Sensitives as Gold and Energy lag. Thematically, Beta / Quality are leading with Momentum lagging; Value flat to Growth, Cyclicals flat to Defensives. UKX -0.3%, SX5E +0.6%, SXXP +0.2%, DAX +0.5%. CSI -0.6%, HSI -0.2%, NKY +1.2%, ASX -0.2%, KOSPI +3.6%.

• US MACRO DATA: Initial/Continuing Jobless Claims and PPI at 8.30am ET. • US EARNINGS: ADIG, AMAT, AMIX, CAPR, FIGR, FPS, FRMI, LGN, LUNR, MWH, OBX, ONDS, SOC, TPR, XE, YSS • GLOBAL MACRO DATA: (UK) GDP, Private Consumption, Industrial Production at 2am ET. (Eurozone) IP at 5am ET. (Japan) Japan Buying Foreign Bonds at 7:50pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

CPI printed in line, but the print seems unlikely to change FOMC opinions which means that the Sept meeting is likely a Hold; the bond market reduced its probability from 48% to 39%. Bonds were unable to hold their gains with the 10Y auction not a headwind; the bond move coincided with a USD rally on no headlines nor material flows. Regardless, Tech / Semis / Momentum was able to rally with multiple AI baskets adding at least 5% on the day.

We think the tactical setup is favorable with markets having climbed the wall of worry which contained 3 major rungs: (i) de-grossing / de-leveraging; (ii) AI monetization; (iii) Fed hike fears / bond vol contagion. The macro picture remains robust with spending metrics supportive of that view and that is buttressed with strong earnings printing record margins. PPI / Retail Sales may shape the broadening narrative, but Tech appears to be the near-term leader. There