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Weekly Newsletter
📊 Key Takeaways From This Week’s Earnings
🏦 Dot Plot Flips
🎙️ Key Points From FOMC Press Conference
🚀 SpaceX Buys Cursor For $60 Billion
💵 Hedge Funds Pile Into Bullish Dollar Bets
QUOTE OF THE WEEK:
“AI is a technology that makes it a lot cheaper to start a new business. We are, at the moment, seeing the number of new applications coming in to start a new business at the highest level ever in U.S. history, and it's gone up a lot in the last 18 months. So I think a much bigger effect on the labor market is not so much the displacement of those few categories that have one task, but really the much bigger opportunity set that comes along. If you have a much cheaper technology, it's much easier to start a business. You can, with agents, start it even without any workers. And if those thousands of businesses that are started at the moment, if just a fraction of those turn out to generate employment, I think that effect on employment will be more significant relative to the negative effect from displacement." - Torsten Slok, Apollo Global chief economist
KEY US ECONOMIC EVENTS NEXT WEEK:
MARKET CLOSE:
WEEKLY MARKET WRAP:
Good Afternoon. Positive week for markets, and in particular for tech stocks, thanks to news of the US and Iran striking a deal to end the war.
Below are the key things to note this week:From cuts to hike:
FOMC kept the funds rate at 3.50–3.75% Wednesday, a unanimous 12-0 vote, but stripped the easing-bias language and shrank the FOMC statement to 130 words, roughly a third of its prior length. The dot plot median moved to 3.75–4.00% by year-end (from 3.4% in March); 17 of 18 participants see inflation risks tilted to the upside, and 9 dots now sit above the current range. Warsh refused to provide his own dot, announced 5 task forces to overhaul Fed operations, and quipped on the 2% target: "the 'two' is left of the decimal point; for now, the 'zero' is to the right." CME FedWatch now prices a 60.7% chance of an October hike.For the week:
CNN's Fear & Greed Index now stands at 37(Fear) out of 100, up 3 points from last week. Details here
The top five trending stocks on Reddit are Micron, Microsoft, SpaceX, AMD, and NVIDIA. Read More
Liquidity:
Banking Reserves + ON RRP: Banking reserves remain at approximately $2.9 trillion. ON RRP balance remains immaterial.
Standing Repo Operations: The New York Fed’s standing repo operation (primarily reflecting SRF take-up) is $0.
Here is a summary of this week’s key economic releases:
Target Rate Probabilities for July 29th FOMC Meeting:
CME Fed Watch
CURATED INSIGHTS & ANALYSIS:
Key takeaways from FOMC press conference:
The Fed held rates steady at 3½–3¾%, while reaffirming its ample-reserves framework.
The new Chair signaled a reset in Fed communication: shorter statement, simpler language, and no forward guidance.
Inflation remains the central focus, with the Committee stressing that price stability must be delivered after more than five years of above-target inflation.
Median SEP projections show GDP growth at 2.2% this year and 2.3% next year, with inflation still elevated at 3.6% this year before easing to 2.3% next year.
The median funds-rate projection moved to 3.8% by year-end and 3.6% next year, implying little near-term easing.
The Chair did not submit his own dot, reinforcing his long-standing criticism of the SEP in its current form.
Five task forces were announced: Fed communications, balance sheet policy, data quality, productivity/jobs, and inflation frameworks.
The 2% inflation target remains outside the scope of the review; the Chair said the Fed must first re-establish its ability to deliver on that objective.
Current policy was described as uneven: restrictive in housing, but harder to characterize as restrictive across broader financial markets.
The Chair argued that less forward guidance could improve market signals by forcing markets to react more to incoming data rather than Fed messaging.
AI and productivity were major themes, with the Chair framing AI as a potential supply-side boost but also a near-term demand driver through data-center investment.
The Committee sees labor markets as stable, with job gains keeping pace with workforce growth and unemployment little changed.
The Chair rejected the idea that the Fed faces a cruel tradeoff between inflation and employment, arguing that strong growth, strong jobs, and low inflation can coexist if policy is right.
The tone was more hawkish than prior meetings: no cut discussion, no forward guidance, and a stronger emphasis on restoring credibility through inflation control.
The main message: this is a new Fed regime — less guidance, more data dependence, more institutional review, and a clearer bias toward proving inflation credibility.
Key points from this week’s earnings:
AI is now picking winners and losers in the same week
Jabil and Accenture told opposite stories on the same day. Jabil raised its AI revenue outlook again, and the stock jumped. Accenture beat on earnings and fell 18%, its worst day on record, amid fears that AI is starting to replace the consulting work it sells. Same theme, two sides. The AI trade is no longer just a long. It now has a short side, and consulting is on it.
Accenture’s problem is the forward number, not the quarter
The quarter was fine. EPS beat, margins expanded, and cash flow was strong. But new bookings fell 13% from last quarter’s record, and management cut its full-year growth guidance. Bookings are the leading indicator for a services business. When they roll over, the next few quarters look harder. A beat today does not help much when the order book is shrinking.
The consumer is spending, but margins are tight
Kroger beat on revenue. Identical sales rose, eCommerce grew 19%, and the media business kept compounding. But gross margin slipped, costs went up, and the stock fell about 8%. This is the same pattern we keep seeing. People are still buying. The question is how much it costs the company to sell to them.
FRONT PAGES:
Trump Signs 14-Point Iran MOU at Versailles: Trump signed the framework agreement Wednesday at Versailles during the G7; Iran's President Pezeshkian countersigned in Tehran on June 18, ending the 100+ day war. The deal reopens the Strait of Hormuz toll-free, lifts the US naval blockade, releases ~$12B of frozen Iranian assets up front, and starts a 60-day clock on substantive nuclear talks. Gulf states pledged a $300B reconstruction fund for Iran. Brent fell ~9% on the week to ~$78; gold cratered ~4% to ~$3,920. Vance's Friday signing trip to Lucerne was scrapped late — a reminder that the MOU is a ceasefire, not a final deal. Israel kept striking Lebanon despite the text requiring it to stop. Read
SpaceX Buys Cursor for $60B — Largest AI Dev-Tools Deal Ever: Four days post-IPO, SpaceX exercised its April option to acquire Cursor parent Anysphere for $60B all-stock, the largest developer-tools acquisition in history. Cursor's ARR scaled from ~$2B in February to $4B by June; the deal supersedes a $2B fundraise at ~$50B from a16z, Thrive, and Nvidia. Microsoft had eyed Cursor and walked away; OpenAI made two prior approaches that were rebuffed. SPCX +16% Tuesday on the news, briefly topping Amazon and Microsoft by market cap. Closes Q3 2026 pending approvals. Read
Hedge Funds Pile Into Bullish Dollar Bets: Currency desks reported a wave of dollar call buying Wednesday-Thursday after the FOMC's hawkish dot-plot flip, reviving the "US exceptionalism" trade. CME data showed dollar-call volumes against the British pound at more than 5x put volumes; EUR/USD options activity hit its highest level since early March, with large notional call trades dwarfing bearish positions per DTCC. BofA's Tobias Jungmann flagged broad demand against G10; Barclays' James Swindell saw vanilla and digital structures both filling. Low implied vol kept the trade cheap. DXY closed near 101 — a 13-month high, up 1.1% on the week — and the 2Y Treasury yield jumped to 4.19%, a 15-month high and the largest one-day move in over a year. Read
Trans-Atlantic Capital-Rule Easing Accelerates: With the Fed/FDIC/OCC comment period closing Thursday, top US bank trade groups (IIF, ISDA, SIFMA, ABA, BPI) filed a joint letter pressing regulators to go further than the March 19 rewrite, which already cuts ~$87.7B in CET1 capital system-wide (4.8% for GSIBs, 5.2% midsize, 7.8% community banks) and abandons the contentious 2023 Basel Endgame draft. Banks want further cuts to trading-book capital, removal of the unused credit-card line charge, and softer G-SIB surcharges; Morgan Stanley estimates the full package could free up to $1T in additional lending capacity. The BoE's PRA has run a parallel track — easing mid-sized bank rules and pushing back UK Basel III by a year; the EU has matched the delay. Read
EARNINGS UPDATE:
Accenture. Adjusted EPS $3.80 versus $3.71; revenue $18.72B, up 6% but just short of estimates. New bookings fell to $19.3B, down 13% from last quarter’s record, and full-year revenue growth guidance was cut to 3–4%, with the U.S. federal business and Middle East disruption dragging. Accenture also announced $4.18B of cybersecurity acquisitions. Shares fell about 18%, the worst day on record. The quarter was fine. The bookings and the guide are the problem, and the market is now asking if AI is eating consulting.
Jabil. Core EPS $3.16 versus $3.10, up 24%; revenue $8.75B, up 12%. Intelligent Infrastructure revenue rose 21% as AI programs scaled, and the company landed a third hyperscale customer. Jabil lifted its full-year AI revenue outlook to roughly $13.6B and raised total guidance to about $35B in revenue and $12.70 in core EPS. Shares jumped about 10%. This is the clean read on AI infrastructure. A beat and a raise, no drama.
Kroger. Adjusted EPS $1.58, a penny shy of $1.59; revenue $46.12B, a beat, up 2.2%. Identical sales excluding fuel rose 1.0%, eCommerce grew 19%, and media profit was up over 20%, but gross margin slipped to 22.7% on higher costs. Full-year guidance was maintained at $5.10–5.30. Shares fell about 8% to a new low. A revenue beat, but the margin squeeze is what the market saw.
CarMax. EPS $1.31 versus $0.94, a big beat, though down 5% from a year ago; revenue $8.01B, up 6%. Combined units rose 3.3% on an 8.4% jump in wholesale; price cuts pressured per-unit margins, but tight cost control carried the bottom line. New CEO Keith Barr laid out a four-pillar strategy. Shares whipsawed before closing up about 13%. A turnaround beat on a stock the market had given up on.
EARNINGS PREVIEW:
Date | Symbol | Name | Time |
23-Jun | CCL | Carnival Corp | Before Open |
23-Jun | FDX | FedEx Corp | After Close |
24-Jun | PAYX | Paychex Inc | Before Open |
24-Jun | MU | Micron | After Close |
25-Jun | SNX | TD Synnex Corp | Before Open |
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