Wed, July 9, 2025 | 7:50AM ET

Mostly good news in the June NY Fed survey. 1-yr inflation back to pre-tariff levels, when the Fed was in "cutting mode."

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Video: The June NY Fed consumer survey showed widespread good news for consumers, including 1-yr inflation expectations back to pre-tariff levels (when Fed was cutting), more job security, better feelings about financial health and even easing credit conditions. So, this is supportive of stocks climbing higher in July. (duration: 3:27).

Mostly good news in the June NY Fed survey. 1-yr inflation back to pre-tariff levels, when the Fed was in cutting mode.

Equities have been largely flat the first few days this week, weak early on Monday morning’s session reflecting hawkish trade commentary by Peter Navarro. In our view, we remain positive about equities in July, aided by favorable seasonals as well as continued negative sentiment. And Tuesday, there were two macro data points worth addressing:

First, President Trump reiterated that tariff deadlines will not be extended past August 1 (on Truthsocial.com) and this is not entirely a surprise. I am not entirely clear if a further delay might happen, but at this moment, the US is collecting $240 billion in annualized tariff revenues.
This “tariff tax” is $2.4 trillion over the next 10 years, assuming zero inflation and zero increase. And this largely offsets the $2.5 trillion higher deficit as scored by the CBO (congressional budget office), so this might explain why the bond market is largely not concerned about the large budget bill that was passed.
And even high-yield markets (see below) have not seen any widening of spreads. So the bond markets are not pricing in a risk of future economic weakness, either from tariff delays/negotiations or from the higher deficits seen in the budget bill.
The other notable release was the June NY Fed consumer survey. Overall, it was positive and showed a consumer that is not suffering from tariff-related costs, nor incrementally worse off:
– 1-yr inflation expectations fell -0.3% to 3.0%.
– larger share expect financial situation to improve
– fewer are worried about job loss
– fewer complain of tightening financial conditions.
Overall, very encouraging. In fact, the 1-yr inflation ahead is back to pre-Feb tariff levels. Meaning, using this methodology, the expectations for inflations are at levels when we were seeing the Fed cut rates.
In other words, we think this also suggests the Fed could be more likely to cut rates if we get benign inflation reports. The first of which will be June CPI reported next week. And then maybe the July CPI report in August. This just means we are not holding our breath that long to wait to see “tariff inflation.”
It is a light week in terms of Macro Data, most notably the initial tariff resumption date on Wednesday has been delayed:
– 7/8 Tue 6:00 AM ET: Jun Small Business Optimism Survey 98.6 vs 98.7e
– 7/8 Tue 9:00 AM ET: Jun F Manheim Used Vehicle Index 208.5
– 7/8 Tue 11:00 AM ET: Jun NY Fed 1yr Inf Exp 3.02%
~~– 7/9 Wed 12:01 AM ET: 90-Day Reciprocal Tariff Pause Ends~~ Delayed to Aug 1st
– 7/9 Wed 2:00 PM ET: Jun FOMC Meeting Minutes

BOTTOM LINE: Still “most hated rally”

This still remains the “most hated” V-shaped stock rally. We view Bitcoin as a leading indicator and thus, we expect stocks to reattain all time highs, which Bitcoin achieved last week. We see S&P 500 reaching 6,600 by year-end.

And the expected drivers for this upside are:

Still most hated rally
Sizable perception gap: Tariff “bark worse than bite”
Hedge funds increased short interest recently
$7 trillion cash on sidelines
Investment outlook better now than in Feb 2025:
– tariff visibility
– tax and de-regulation visibility
– US cos survived 5^th major “stress test”
– Fed more dovish in 2026

As for what we would buy

Washed out stocks
MAG7 & Bitcoin
Industrials
Financials: Large-cap and regional banks
Small-caps

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Key Incoming Data July:

~~7/1 9:45 AM ET: Jun F S&P Global Manufacturing PMI~~ Tame
7/~~1 10:00 AM ET: May JOLTS Job Openings~~ Mixed
~~7/1 10:00 AM ET: Jun ISM Manufacturing PMI~~ Tame
~~7/3 8:30 AM ET: Jun Non-farm Payrolls~~ Mixed
~~7/3 8:30 AM ET: May Trade Balance~~ Tame
~~7/3 9:45 AM ET: Jun F S&P Global Services PMI~~ Tame
~~7/3 10:00 AM ET: May F Durable Goods Orders MoM~~ Tame
~~7/3 10:00 AM ET: Jun ISM Services PMI~~ Tame
~~7/8 6:00 AM ET: Jun Small Business Optimism Survey~~ Tame
~~7/8 9:00 AM ET: Jun F Manheim Used Vehicle Index~~ Mixed
~~7/8 11:00 AM ET: Jun NYFed 1yr Inf Exp~~ Tame
7/9 2:00 PM ET: Jun FOMC Meeting Minutes
7/15 8:30 AM ET: Jun Core CPI MoM
7/15 8:30 AM ET: Jul Empire Manufacturing Survey
7/16 8:30 AM ET: Jun Core PPI MoM
7/17 8:30 AM ET: Jul Philly Fed Business Outlook
7/17 8:30 AM ET: Jun Retail Sales
7/17 9:00 AM ET: Jul M Manheim Used Vehicle Index
7/17 10:00 AM ET: Jul NAHB Housing Market Index
7/17 4:00 PM ET: May Net TIC Flows
7/18 10:00 AM ET: Jul P U. Mich. 1yr Inf Exp
7/22 10:00 AM ET: Jul Richmond Fed Manufacturing Survey
7/23 10:00 AM ET: Jun Existing Home Sales
7/24 8:30 AM ET: Jun Chicago Fed Nat Activity Index
7/24 9:45 AM ET: Jul P S&P Global Services PMI
7/24 9:45 AM ET: Jul P S&P Global Manufacturing PMI
7/24 10:00 AM ET: Jun New Home Sales
7/24 11:00 AM ET: Jul Kansas City Fed Manufacturing Survey
7/25 8:30 AM ET: Jun P Durable Goods Orders MoM
7/28 10:30 AM ET: Jul Dallas Fed Manuf. Activity Survey
7/29 9:00 AM ET: May S&P CS home price 20-City MoM
7/29 10:00 AM ET: Jul Conference Board Consumer Confidence
7/29 10:00 AM ET: Jun JOLTS Job Openings
7/30 8:30 AM ET: 2Q A GDP QoQ
7/30 2:00 PM ET: Jul FOMC Decision
7/31 8:30 AM ET: Jun Core PCE MoM
7/31 8:30 AM ET: 2Q ECI QoQ

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023:

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