⏱️ ~4 min read
📊 Today's Numbers
US CPI (June, YoY) ▼ 3.50%: biggest monthly drop since 2020
Core CPI (June, YoY) ▼ 2.60%: lowest since late 2025
IBM ▼ 25%: worst single-day fall in 115 years
Goldman Sachs EPS ▲ $20.98: crushed $14.48 consensus
China Q2 GDP ▼ 4.30% YoY: well below ~5% official target
Brent Crude ▲ $84.95/bbl: elevated despite Hormuz fee reversal
🏦 MACROECONOMIC
Photo: Mike van Schoonderwalt
Inflation Just Posted Its Biggest Monthly Drop in Six Years. Here's the Catch.
June CPI fell hard, core inflation is cooling, and the odds of a July Fed rate hike have been cut in half. That's genuinely good news. The problem is that the thing that caused it — cheaper gas from an Iran ceasefire — started reversing the moment the ink was dry.
CPI fell 0.40% month-on-month, pulling the annual rate from 4.20% to 3.50%, well below the 3.80% consensus forecast
Energy drove the drop entirely: the energy index fell 5.70% on the month, with gasoline down 9.70%, but annual gasoline is still up 26.70% year-on-year
Core CPI eased to 2.60% annually, its lowest since late 2025, and CME FedWatch pricing for a July rate hike halved to 16% after the release
Fed Chair Warsh explicitly warned against reading "mission accomplished" into the data, with Iranian hostilities already reigniting in early July
💬 Inflation just posted its biggest monthly drop in six years — but the reason it fell has already started reversing.
📈 EQUITIES
Photo: Daniel Dan
IBM Just Had the Worst Day in Its 115-Year History. The Rest of the Sector Took Notice.
IBM's surprise profit warning wasn't just bad company news. It confirmed something the market had been quietly pricing in: corporate IT budgets are being gutted and redirected toward AI hardware, and the legacy software vendors are absorbing the damage.
IBM Q2 revenue came in at $17.20 billion, missing the $17.86 billion consensus, and the stock fell roughly 25%, wiping out approximately $30 billion in market value
The contagion spread fast: ServiceNow fell 6.40%, Workday dropped 9.20%, Accenture lost 3.70%
IBM CEO Arvind Krishna confirmed the shift is structural, with customers reallocating IT budgets toward AI servers and memory, away from legacy software and services
💬 Corporate IT bosses are raiding their software budgets to buy AI chips — and the collateral damage is landing on workers and businesses still running legacy contracts.
🏦 MACROECONOMIC
Photo: Shuaizhi Tian
China's Economy Grew 4.3% in Q2. Its Export Machine Is Covering for a Consumer That Isn't Spending.
China missed its growth target, but the headline number obscures something stranger underneath: exports are surging at the fastest pace in nearly five years while domestic retail demand is falling. The economy is running in two directions at once.
Q2 GDP grew 4.30% year-on-year, missing analyst consensus and well below the ~5% official annual target
June exports surged 27% year-on-year to a record $125.60 billion trade surplus, even as domestic retail demand fell year-on-year
The yuan firmed to 6.7635 per dollar, a one-month high, as markets priced in likely stimulus ahead of a Politburo meeting expected in late July
💬 The world's largest middle class isn't spending, and Beijing hasn't blinked yet — watch the Politburo meeting.
📰 Also Today
Goldman Sachs posts record $20.98 EPS: Q2 earnings came in 44.90% above the $14.48 consensus on $20.34 billion in revenue, with Goldman shares up 8.46% on the day — a Wall Street earnings season that suggests high-rate, high-volatility conditions are a gift to trading desks even as they squeeze household borrowers.
Trump scraps 20% Hormuz shipping fee: WTI closed at $79.56/bbl (+1.82%) and Brent at $84.95/bbl (+1.98%) after the reversal removed an immediate risk premium, but the underlying Iranian port blockade — which disrupts roughly 20% of seaborne oil trade — remains unresolved, and it's still unclear whether Gulf investment deals will be enough to hold the line on prices.
KOSPI surges 7% as Asian markets rally: South Korea's index reclaimed its position as the world's top-performing major benchmark, led by SK Hynix up 11% in Seoul after its Nasdaq ADRs gained 27% the prior session; Singapore Q2 GDP also beat at 5.70% year-on-year, with manufacturing up 12.20%.
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Not investment advice. For informational purposes only.