Morning in New York: focus on the start of the reporting season and the consumer price index

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The main event of the macroeconomic calendar on July 15 will be the publication of the Consumer Price Index (CPI) for June. The consensus for the core and overall index assumes their growth by 0.3% m/m in both cases with an increase of 2.7% and 3% y/y, respectively. The data will help gauge the impact of Trump's tariffs on the US economy. Freedom Broker analysts forecast a more marked deviation of CPI from average benchmarks. Given the effect of the White House's foreign trade policy, which we estimate at +0.87% m/m for core goods, both indicators could rise by 0.38% m/m. If inflation does come in above consensus, it could trigger a correction in the S&P 500 within 1%. Price growth is expected to accelerate in the coming months as duties are gradually built into the cost of goods and services for end consumers. 

The European Union is developing a second package of countermeasures against the United States that could affect U.S. exports totaling 72 billion euros, of which 65.7 billion euros are industrial goods and 6.4 billion euros are agricultural products. The largest category is airplanes and components. Tariffs could be imposed on these products to the tune of 11 billion, posing serious risks for Boeing (BA). No vote has yet been scheduled on the issue. The day before, EU trade ministers expressed support for the negotiating strategy proposed by the European Commission. Meanwhile, the entry into force of the first retaliation package, covering 21 billion euros worth of goods from the US, has been postponed until August 6 with the expectation of buying time to reach an agreement on mutual trade. The EU is trying to strike a balance between concessions and retaliatory measures to Trump's new tariff threats;

This Tuesday is the start of the reporting season, which is traditionally opened by the largest financial corporations. Before the main session starts, J.P. Morgan (JPM), Wells Fargo (WFC), Citigroup (C), BlackRock (BLK), Bank of New York Mellon (BK) and State Street (STT) will release their results. We see room for positive management commentary on the back of banking deregulation and the resilience of the US economy;

US stock index futures are trading in the plus, mainly due to the news from Nvidia (NVDA). We assess the balance of risks for the upcoming session as neutral with increased volatility. We focus on S&P 500 movements in the range of 6200-6340 points (from -1.1% to +1.1% to the previous session's closing level). The main risk is the inflation release, while corporate reports are likely to support the bulls;

- NVIDIA (NVDA) is set to resume sales of its H20 processor in China amid improving trade relations between Washington and Beijing, and following meetings between the company's CEO Jensen Huang and officials from both countries. NVDA stock reacts to the news with a rise of more than 4%;

- Quotes of The Trade Desk (TTD) are up 11.5% in the postmarket following the announced inclusion of its stock in the S&P 500 effective July 18. The company will replace ANSYS (ANSS), which is being acquired by Synopsys (SNPS). 

- The price for Model Y Tesla (TSLA) in India is $69.77 thousand without taxes, while in the U.S. this car sells for $44.99 thousand. The difference is due to the impact of import duties;

July 14 trading on American stock exchanges ended in plus. S&P 500 added 0.14%, Nasdaq 100 rose by 0.33%, Dow Jones rose by 0.2%, Russell 2000 - by 0.67%. Volatility was low. The broad market was supported by the communications sector (XLC) and financial companies (XLF), while energy (XLE) was the outsider;

The session passed in the absence of new drivers, despite Trump's announcement of plans to impose a 30% duty on goods from the EU and Mexico from August 1. Despite the statements of European negotiators about serious disagreements, the markets reacted with growth. Investors are betting that the president will make concessions, as has happened many times before. At the same time, decreasing concerns over the unpredictability of the White House foreign trade policy become a potential risk: there is a possibility that Trump will refuse to further postpone the introduction of increased tariffs, having become convinced of the futility of negotiations;

FRB Cleveland head Beth Hammack said she sees no urgent need to cut interest rates, given that inflation is still too high and uncertainty about the impact of foreign trade policy on prices persists. 

- Shares of Veritex Holdings (VBTX: +19.5%) soared on news of a takeover by Huntington Bancshares (HBAN: -1.8%). The deal, valued at a total of $1.9 billion, will be paid for in shares at about $33.91 per unit and is tentatively expected to close early in the fourth quarter. 

- Fastenal (FAST: +4.2%) reported significant revenue and earnings growth for the quarter. Its sales increased by 8.6%, surpassing $2 billion for the first time.  

- Quotes of Autodesk (ADSK: +5.1%) reacted positively to the abandonment of plans to acquire PTC (PTC: -1.2%). The management stated that it will maintain focus on its key strategic priorities - cloud solutions and artificial intelligence;

- Waters' (WAT: -13.8%) shares fell in value on news of a merger with the Biosciences & Diagnostic Solutions unit of its larger rival Becton Dickinson and Co (BDX: +0.6%) in a $17.5 billion deal expected to be completed by the end of the first quarter of 2026.

This article was AI-translated and verified by a human editor