Waiting on Inflation;
Chop, Chop

U.S. Futures & World Markets

US equity futures are mixed as we await inflation data to end the week — PPI today and CPI tomorrow. Yields keep grinding higher as the 10-year pushes toward the psychologically important 5.00% level.

From the JPMorgan desk: OIS is pricing a 63% probability of a 25bp hike at the September 16 FOMC meeting. A dovish CPI print should ease the pressure from rising yields and allow equities to refocus on growth and earnings.

The market craves certainty, and we're far from certain on where interest rates, oil prices, and inflation are headed. Until we get more clarity, expect this tape to "chop around." https://mcore.hopp.to/youtube382

CORE Headlines

• Dell sells $5B of debt. — Bloomberg
• An Anthropic researcher quit the AI industry over fears that labs are racing to build systems they won't be able to control. — WSJ
• Andrew Tulloch, offered a $1B+ pay package to join Meta last year, is leaving the company. — WSJ
• Google said it would spend more than $15B to develop AI infrastructure in Finland. — WSJ
• US Treasury uncovers $17.5B in suspected health care fraud.
• Meta (META) upgraded to Overweight at JPMorgan, target $820.

Charts & Data

Stocks and bonds rallied or fell together in 70% of the last 50 sessions — something rarely seen in the 21st century. The 60/40 portfolio relies on bonds diversifying equity risk, but the correlation chart keeps going up. Corgi Invest via Daily Chartbook.

Commodities are still extremely cheap relative to stocks. Jason Perz, Against All Odds Research via Daily Chartbook.

Systematic strategies still leaning bullish at the 85th percentile. Discretionary investors back to neutral at the 47th percentile with room to add risk. Deutsche Bank via Daily Chartbook.

S&P entered today with its most oversold 10-day A/D line since just after the Iran War began. @bespokeinvest via Daily Chartbook.

When fewer than 15% of S&P stocks trade near their 1-year highs while the index is within 5% of a 5-year high, the setup has a 75% win rate over the following month. SentimenTrader via Daily Chartbook.

Only 27 S&P 500 stocks at stretched valuations — a level consistent with bear market lows, while we're within 2% of an all-time high. Matt Cerminaro via Daily Chartbook.

30-year fixed mortgage rate rose to 7.05%. Effective rate on mortgage debt outstanding rose to 4.33% — a 15-year high. Haver Analytics via Daily Chartbook.

The Carson Research proprietary LEI says the economy is on strong footing and the odds of a recession are very low. @ryandetrick via Daily Chartbook.

Interesting Reads

• Tyler Cowen: Is college still worth it? — The Free Press
• How to actually become more attractive, according to science — BBC Science

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