To The Moon

For the week ending Fri, 17 Jul 2026, there were 3 main catalysts:

AI & Chip Sell-Off:

• Semiconductor and mega-cap tech stocks suffered a severe correction.

• Investors rotated out of AI heavyweights due to concerns over whether (a) long-term fundamentals and (b) end-demand will justify sky-high valuations.

• This was compounded by the debut of a new, competitive AI model from Chinese startup Moonshot.

Mixed Corporate Earnings:

• Q2 2026 earnings kicked off, bringing both positive news and stark disappointments.

• While traditional financials and select industrials beat expectations, the tech & streaming spaces weighed on major indexes as players like $Netflix(NFLX)$ and $Alphabet(GOOG)$ reported slowing or delayed growth.

Geopolitics & Surging Oil Prices:

• Underpinning the flooring of the US market of course, is the escalating hostilities between US & Iran.

• Specifically, US non-stop airstrikes targeting Iranian military assets and blockades disrupting traffic through the Strait of Hormuz.

• Driving crude and gasoline prices sharply higher and US market sharply lower.

US Economic Reports Effect ?

Given above ‘dampening’ catalysts, did US economic reports out last week have any positive impact on US market ?

Last Week’s Reports:

• Mon, 13 Jul 2026 - US Monthly Treasury Balance for June 2026.

• Tue, 14 Jul 2026 - NFIB Index of Small Business Optimism for June 2026.

• Tue, 14 Jul 2026 - Consumer Price Index (CPI) for June 2026.

• Wed, 15 Jul 2026 - Producer Price Index (PPI) for June 2026.

• Thu, 16 Jul 2026 - US Retail Sales for June 2026.

• Thu, 16 Jul 2026 - US Jobless Claims.

• Fri, 17 Jul 2026 - US Import Prices for June 2026.

For June 2026

US Monthly Treasury Balance.

For June 2026, US Monthly Treasury statement revealed a federal surplus of $145 billion, that narrowed the overall FY 2026 deficit.

Mid-year fiscal snapshot detailed the following:

Total Receipts & Outlays:

• June 2026 saw $564 billion in federal receipts, boosted significantly by surging corporate and individual quarterly tax payments. (see above, left)

• Outlays reached $419 billion, resulting in the single-month surplus.

Fiscal Year to Date (FYTD):

• Despite the June surplus, the cumulative deficit for the first 9 months of FY2026 (October - June) sat at approximately $1.12 trillion. (see above, right)

Primary Drivers:

• Major revenue contributors included (i) individual income taxes and (ii) social insurance.

• Top expenditures meanwhile were heavily dominated by (a) Social Security, (b) Medicare, and (c) escalating net interest on the national debt.

• It will be interesting to note that US Treasury is paying $24 billion weekly in interest on its debts or $88 - 100 billion monthly.

While a June 2026’s $145 billion surplus sounds positive on the surface, it is a seasonal anomaly rather than a sign of structural fiscal health.

This is because the month of June always brings a massive influx of (1) quarterly corporate and (2) individual tax revenues, that temporarily masks the government's underlying financial problems.

The report is overall bad news, disguised by a single month of good luck.

For June 2026

US NFIB Small Biz Optimism.

For June 2026, the NFIB Small Business Optimism Index rose 2.1 points to 97.4, approaching its 52-year historical average of 98.0. (see above)

While expectations for improved business conditions rose, 21% of owners cited inflation as their top business problem, highest reading since late 2024.

Other key findings from the report included:

• Pricing & Costs: S

  hare of firms increased their average selling prices increased for the 4th consecutive month, reaching its highest level since January 2023.

• Hiring Plans: Share of business owners planning to increase hiring over the next 3 months rose to 11%.

• Business Uncertainty: The NFIB Uncertainty Index dropped by -2 points to 89, though it remained well above its historical average of 68.

• Capital Expenditures: Investment plans strengthened, with 20% of firms planning capital outlays over the next 6 months.

Small business confidence rose near historical averages driven by increased hiring and investment, reflecting an active choice for growth.

Inflation has re-emerged as the primary business concern, forcing price hikes that may pressure the US Fed to maintain higher interest rates.

This is a moderately positive (good) report, but it comes with a major warning sign.

It is a moderately positive (good) report for economic growth, but a bad one for inflation control. US economy though resilient, is still running too hot.

For June 2026

Consumer Price Index (CPI).

In a twist of fate, US Bureau of Labour Statistics (BLS) CPI report for June 2026, revealed a sharper-than-expected cooling in headline inflation.

The report indicates a major divergence, with volatile headline metrics declining rapidly while "sticky" core prices show slower underlying momentum.

Headline CPI.

• Monthly change: Fell by -0.4% for the month vs analysts’ estimates of -0.1% vs May 2026’s +0.5%. The surprising decline was due to falling energy costs, marking the largest monthly drop seen since April 2020. (see below)

• Annual change: Decelerated sharply to 3.5% YoY vs analysts’ estimates of 3.8% vs May 2026’s 4.2%.

The significant drop was heavily driven by dissipating oil price shocks and a -5.7% MoM decrease in energy costs.

It also implies that May 2026’s spike was largely temporary, providing rapid, albeit volatile, relief to everyday consumer budgets.

Core CPI

• Monthly change: Unchanged at 0.0% vs Wall Street consensus of 0.2% vs May 2026’s increase of 0.2%.

• Annual change: Eased to 2.6% YoY vs Wall Street consensus of 2.8% vs May 2026’s 2.9%.

As core inflation excludes energy & food, it shows that "underlying" price pressures are moderating, but not as dramatically as the headline rate suggests.

Nevertheless, inflation remains firmly above tUS central bank’s ideal 2% target, complicating future monetary policy.

On Tue, 14 Jul 2026 morning, US stocks popped when it opened after the 8;30am inflation report was released.

Unfortunately, by the time 4pm came around, DJIA was pressured by a -20% slide in IBM stock.

However, both S&P 500 and Nasdaq both rose following the data release.

For June 2026

Producer Price Index (PPI).

Like its cousin report - the consumer price index released a day earlier, the Producer Price Index reports also came in cooler than expected.

Headline PPI.

• Monthly change : fell by -0.3% for the month vs analysts’ flat estimates of 0.0% vs May 2026’s +0.6%. (see below)

• Yearly change: slowed to 5.5% vs consensus estimate of 6.2% vs May 2026’s 6.0%.

Core PPI.

• Monthly change: Increased by +0.2%, vs Wall Street estimates of 0.4% vs May 2026's downwards revised +0.1%.

• Yearly change: Increased by +4.7% vs Wall Street estimates of 5.2% vs May 2026’s 4.6%, rising marginally.

Overall, US producer inflation reports are a “bad” set of reports disguised by cheap gas (in June 2026).

The plunging headline PPI’s numbers just proved short-term political and consumer relief.

It remains a fact that core PPI deteriorated MoM proves that underlying inflationary forces are still actively strengthening.

Thus, giving US Fed very little room to cut interest rates.

For June 2026

US Retail Sales.

Spending at US retailers in June 2026 was weaker than expected, despite US hosting the World Cup and drawing tourists from around the world and online sales events.

For the month of June 2026, US Census Bureau report reported sales rose by +0.2% MoM vs analysts’ consensus of 0.2% vs May 2026’s upwards revised 1.0%. (see above)

Although the MoM reading seems ‘small’, the sales amount came to about $768.6 billion.

This modest headline growth points to a healthy, sustainable deceleration in consumer spending following May's upwardly revised 1.0% increase that has been ‘distorted’ by oil prices surged.

With oil prices backing down in June 2026, the headline number was dragged down by a -5.3% MoM drop in gasoline station receipts that reflected the cheaper fuel prices.

Excluding gas, sales climbed +0.7% and strong yearly momentum of 6.7% vs May 2026’s upwards revised 7.33%. (see above)

US Jobless Claims.

Overall, the 16 Jul 2026 reports show that US labour market continues to exhibit strong resilience characterized by a "slow-hire, slow-fire" dynamic and layoffs remain historically low but finding a new job still takes longer.

Weekly claims.

For week ending 11 Jul 2026, weekly claims fell by -8,000 to 208,000 vs market estimates of 216,000vs previous week’s upwards revised 216,000. (see below)

The 4-week average that is ‘moderate’ also fell by - 4,750 to 214,250 claims.

Latest numbers show that businesses are keeping headcount steady despite interest rates remain elevated.

Continuing claims.

For week ending 04 Jul 2026, continuing claims fell by -16,000 to 1.805 million vs market consensus of 1.82 million vs previous week’s upweards revised 1.821 million. (see above)

Although continuing claims fell to 1.805 million, they hover near multi-year highs.

This signals that once workers lose a job, navigating the hiring process takes longer as corporate expansion appetite remains subdued.

Needless to say, latest claims reports only serve to reinforce the stance that US central bank should not be looking at easing interest rates at anytime soon.

US Import Prices.

US import prices unexpectedly rose in June 2026 as declines in the costs of food & energy products were more than offset by higher prices for capital and consumer goods.

This led to the largest annual increase in imported inflation in nearly 4 years. (see above)

US import prices rose by +0.3% MoM, defying Wall Street expectations of -0.7% and at the same time, marked a notable cool down from May 2026’s downwards revised 1..7%.

The unexpected upside was primarily driven by non-fuel prices, that climbed by 0.4% (extending a 0.7% increase from May 2026).

This was supported by a +0.4% bump in imported capital goods, reflecting strong US demand for technology & AI-related products.

Like other US economic reports eg. Retail sales, fuel import prices bucked the trend, falling by -0.4% following massive spike in previous months.

Annually, the growth rate of imports accelerated to 7.1%, the highest over-the-year increase since August 2024.

From an Inflation viewpoint, the June report is a hot one.

Although overall consumer & wholesale inflation cooled down across the board, import prices unexpectedly rose, pointing to mounting, stubborn inflationary pressures originating from abroad that could make their way to US businesses and consumers.

And import prices rise can be traced back to high oil prices that act as a global tax, raising raw material and shipping costs for foreign factories, which are then pass onto US buyers as higher import prices.

In summary, the June report is decidedly bad for the overall health of US economy.

It shows that underlying inflationary pressures are far stickier and more widespread than economists anticipated.

My viewpoints: (mine only)

The latest US reports’ data paints a picture of a highly resilient US labour market punctuated by historically low jobless claims alongside recovering small business hiring confidence.

Concurrently, the broader US economy shows sustained strength as solid underlying retail sales and rising corporate optimism point to sturdy growth despite restrictive borrowing costs.

Most important, domestic inflation fell below expectations across consumer, producer, and core metrics for June 2026, driven mainly by a dramatic drop in energy prices.

Having said that, the latest strike & counterstrike between US & Iran has already driven up Brent & WTI crude oil prices.

Details can be found in my other post, click here ! for the details.

The higher Brent & WTI oil prices will (again!) reverse some of June’s disinflationary effects.

For the labour market, higher energy prices will act like a tax on households and margin-compressed small businesses, potentially tempering hiring plans and nudging jobless claims up from current lows.

On US economic growth, the combination of (a) stickier inflation and (b) tighter financial conditions (higher-for-longer rates) would dampen real consumption and capital spending, increasing the risk of a growth scare even if the possibility of a recession returning is remote at the moment.

But for how long can goodwill persists, when there is no clarity that both US & Iran are willing to back down on their strikes and counterstrikes.

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• Oil back in focus as US attacks Iran ?

• INTC : Q2 Earnings is Proof of Return ?

• NFLX, chance to Rise with Q2 Earnings ?

• Do you think both US and Iran will agree to a cease fire (again!) this week ?

• Do you think US economic reports for July 2026 will take a turn for the worse when reported in August 2026 ?

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