Hot Temps and Cool Nerves

Entering the second half of the year, mid-July has arrived with its typical imperatives that come along with the apex of the summer to finalize vacation itineraries and (just maybe) relax a bit before summer ends, the kids go back to school, and the businesses that always seems to creep up late in the year arrives. At the same time it seems the news cycle has been anything but relaxing. Temperatures have spiked across the country (with a side of apocalyptic smog from Canadian wildfires) just as tensions flared again with renewed Iranian military action, sending a brief jolt through oil markets. And yet, cooler heads are prevailing, as equity markets have mostly shrugged it off. Not with indifference exactly, but with a kind of “seen this show before” calm that views geopolitical noise as background static rather than an imminent threat. Volatility ticked up, oil wobbled, and then the tape moved on. It appears investors appear increasingly willing to look through short-term shocks toward the underlying fundamentals. With this backdrop in mind, we think it’s a good time to review where markets are trending, where earnings growth is leading (especially in AI), and what is happening on the inflation front...

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