This week’s data pulled in several directions at once. The Atlanta Fed’s GDPNow model marked its Q2 growth estimate down to 1.2%, a sharp drop from 2.5% just days earlier, while May job openings held near their highest level in two years. Home prices fell for a second straight month across the Case-Shiller and FHFA readings, and rents kept softening. In the markets, bottom-up consensus still looks for S&P 500 earnings to grow 22% year over year in the second quarter, and flows into US equities have run well ahead of their historical range. At the Fed, Chair Kevin Warsh said inflation risks have eased while holding firm on offering no forward guidance ahead of the July meeting. The full roundup across the economy, the markets, and the Fed is below.

 

US Economy

 

The Atlanta Fed’s GDPNow model is now tracking Q2 GDP at just 1.2%, down sharply from 2.5% on June 25.

The May JOLTS report showed that job openings were little changed, hovering at the highest level in two years and above consensus estimates.

The employment component showed strength. Perceptions of broader business conditions were flat, but future expectations rose. Input price pressures remained firm, though future expectations eased.

 

 

Trade policy uncertainty has declined sharply. This chart compares the AI Capex for the US and China.

 

Source: Data Is Beautiful   Read full article

 

The S&P/Case-Shiller 20-City Home Price Index fell for the second consecutive month. The FHFA House Price Index also declined, reversing some of the gains from the prior month. US rents continue to soften on a seasonally adjusted basis.

What are the highest paying college degrees in the US?

 

 

The US declined to extend the USMCA for another 16 years, triggering annual reviews and a 10-year countdown to the agreement’s expiration.

 

US Stock Market

 

Bottom-up consensus expects S&P 500 EPS to grow by 22% year over year in Q2.

 

Source: Goldman Sachs

 

Here’s a look at the consensus estimates by sector.

 

Source: Goldman Sachs

 

Flows into US equities have been remarkably strong so far this year.

 

Source: Goldman Sachs

 

The Fed

 

Fed Chair Kevin Warsh said inflation risks have eased in recent weeks, reaffirmed the Fed’s commitment to restoring price stability and preserving its independence, and reiterated that policymakers will provide no forward guidance ahead of the July meeting.

 

Source: @economics   Read full article

 

He further commented that reducing the Federal Reserve’s balance sheet will take years rather than months, signaling any further balance-sheet runoff will be gradual and implemented only after extensive public consultation.

 

Source: @economics   Read full article

 

Rates markets continue to discount more than one hike in 2026.

 

Great Quotes

 

“Men can be divided into two groups: One that goes ahead and achieves something, and one that comes after and criticizes.” – Seneca

 

Picture of the Week

 

Huayna Potosí Mountain in Cordillera Real

 

 

 

All content is the opinion of Brian Decker