US EQUITIES COLOR UNCH

S&P -32bps closing @ 7,728 w/ a MOC of $3.7bn to SELL. NDX -33bps @ 29,525, R2K +36bps 3,028, and Dow -34bps @ 53,791. 14,909bn shares traded across all US equity exchanges vs ytd daily avg of 19.251bn shares. VIX -103bps @ 15.3, WTI Crude +156bps @ $83.41, US 10YR -0.016bps @ 4.6904%, gold -49bps @ 4,369, dxy +0bps @ 99.81 and Bitcoin -84bps @ $63,571

Mkt largely unchanged amid very little news to trade ahead of tomorrow's CPI print (for July core CPI, GIR expects +19bps in vs 20bps cons). Small caps out-performed on the back of easing yields. AI complex / Semis modestly higher on NVDA on announcing $500bn financing partnerships. Alternative asset managers (GSFINALT +449bps) finished at the top of the leaderboard. Risk/reward stays attractive into 2H on stabilizing revisions and compelling multiples, with fundamentals intact — record fundraising, re-accelerating wealth flows, peak credit outflows, and growing AI financing leverage. Top picks: TPG, STEP, CG, HLNE, KKR. On the flip side, some questions on the weakness in China ADRs (GSCBCCAI -288bps), convos pointed towards potential source-of-funds trading / rotation back into Korea, Taiwan, and Japan. Our floor was a 3 on a 1-10 scale in terms of overall activity levels with LO and HF skews benign.

DERIVS: Another slow summer day with S&P failing to realize the daily straddle going into today's session. As spot trickled lower into the afternoon, so too did vol with fixed strike vols down on the day. NDX vol underperformed, alongside spot, with fixed strike vols down .80v in the front end of the curve. The NDX spread to SPX continued to compress with end of year tenors down .25v on the day. Flow wise, the desk was quieter overall but saw investors come in to move pieces around in both the index and singles spaces ahead of the key econ prints this week. The desk has been flagging that the IWM straddle is already implying the lowest event move since Sep 2023. We think small caps' beta to rates should be higher following the RUT index rebalance and like owning gamma ahead of the events. The S&P implied move through tomorrow's close is 0.59%. (TY Gail Hafif)