June Core CPI Tuesday is the most consequential day next week, since will impact on Fed timing of cuts. 2Q25 EPS season also starts next week.

VIDEO: Next week is a heavy week of macro led by June core CPI and also the start of 2Q25 earning season. The Fed is also closely watching this CPI report and likely the key catalyst.

Please click below to view our Macro Minute (duration: 4:44).

The S&P 500 is up 1.2% so far this month and next week is a important week as both June Core CPI released (Tue) and 2Q25 EPS season gets underway in size.

• The Street is looking for June Core CPI MoM of +0.28%, which is above +0.13% MoM in May. But let me give some perspective. Looking at consensus estimates for Core CPI, the last 9 forecasts (Oct to now) were literally:
  – +0.30% each month since Oct
  – 8 consecutive months where consensus expected +0.30%
• The real driver in June Core CPI will be whether shelter continues to decelerate and whether auto insurance slows. There may be some impact from goods inflation. And Fed Chair Powell noted he is expecting some pickup in Core CPI from goods inflation. But as we noted previously, we view this as not only temporary (price level change due to tariffs) but also arguably not inflation, since it is a tax paid to the US gov’t. If the US raised income tax rates, the Fed would not view that as inflationary, even though “consumers pay for it” — so not sure why tariffs are viewed as inflationary.
• The macro data next week is below. The most important is the Core CPI Release on Tuesday:
  – 7/15 Tue 8:30 AM ET: Jun Core CPI MoM    0.28%e
  – 7/15 Tue 8:30 AM ET: Jul Empire Manufacturing Survey    -10.0e
  – 7/16 Wed 8:30 AM ET: Jun Core PPI MoM    0.23%e
  – 7/16 Wed: Super Granny Market Update
  – 7/16 Wed 2:00 PM ET: Jul Fed Releases Beige Book   
  – 7/17 Thu 8:30 AM ET: Jun Retail Sales    0.1%e
  – 7/17 Thu 8:30 AM ET: Jul Philly Fed Business Outlook    -0.5e
  – 7/17 Thu 9:00 AM ET: Jul M Manheim Used Vehicle Index  
  – 7/17 Thu 10:00 AM ET: Jul NAHB Housing Market Index    33e
  – 7/17 Thu 4:00 PM ET: May Net TIC Flows   
  – 7/18 Fri 10:00 AM ET: Jul P U. Mich. 1yr Inf Exp
• As for 2Q25 EPS season, bottoms-up consensus is for +5.8% YoY. But earnings beats have been >5% for the past few quarters, so this likely ends up being +10% EPS YoY. This is impressive consider commodity sectors will see a sharp decline in earnings. Energy EPS is expected to fall -25% YoY.
• Looking out for the next few years, the top 3 contributors to EPS growth remain AI-related sectors:
  – MAG7 +16%
  – Comm services ex-MAG7 +15%
  – Tech ex-MAG7 +14%
• So AI remains the biggest driver for EPS growth for the S&P 500, and arguably for the world. By the way, if the Fed starts cutting later this year, the hurdle-rate/ROIC for AI spend is lowered, as the “bar to invest” in AI comes down. Thus, AI stocks should benefit from a lowering of interest rates.
• For now, seasonals remain positive. We are looking for June Core CPI Tuesday as the most consequential day next week, since this will have some impact on Fed thinking for timing of cuts. So stay tuned.

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
  

The bull market has proven itself intact. We previously identified two lists of “wash out” stocks, both large-cap (22 names) and SMID-cap (27 names). We want to look at stocks which did not make a new low between April 1-April 8, even as the S&P 500 fell to new lows.
The large-cap criteria is as follows:

• Current Market Cap >$15 Billion
•  Declined more than 30% before Feb 18th
•  Didn’t make new closing low between April 1st & April 8th
•  Current price down more than 25% from 52W High

The large-cap “washed out” tickers are:
WBD LULU TSLA DKNG DG DLTR BF STZ RKT COIN HOOD HUM UAL LDOS TEAM HUBS MSTR CRM NET SMCI EIX VST
The SMID-cap criteria is as follows:

• Current Market Cap <$15 Billion
•  Declined more than 30% before Feb 18th
•  Didn’t make new closing low between April 1st & April 8th
•  Current price down more than 25% from 52W High
•  Short interest Day to Cover Ratio >2

The SMID-cap “washed out” tickers are:
DJT ROKU AS LCID RIVN LKQ CROX NCLH WBA CELH SOFI MKTX COLB GRAL INSP PRGO CNXC DAY LUV LYFT CFLT DT ESTC PCOR LITE ALAB AES

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45 SMID Granny Shot Ideas: We performed our quarterly rebalance on 5/22. Full stock list here -> Click here

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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 Mixed
• 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: