Tariff Truce Deadline Collides with CPI Week

Good morning. The U.S.–China tariff truce runs out tomorrow, same day as CPI. That’s a market two-for-one special—only the kind that keeps you up at night.

Stocks still look bulletproof at these highs, but “bulletproof” can mean “just hasn’t been tested yet.” Tariffs are sneaking into prices like inflation in a necktie, polite but still dangerous.

The AI trade is still carrying the index on its back—heroic, sure, but even heroes get tired. Cash flow still beats fairy tales, and we’ll size up the tariff pass-through and the Fed cut math without the daydreams.

Don't forget our financial trivia question at the end of the newsletter.

We’ll strip the fairy dust from tariff math and Fed timing, and see what’s left standing. Let’s cut through the noise. And here are your Morning Bullets.

– Truly yours, Fred Frost

📈 Yesterday's Market Recap

Friday’s rally carried into a quiet premarket as traders squared up for CPI. Tariffs stayed top‑of‑mind, but risk held firm and defensives lagged. Commodities and the dollar chopped as rate‑cut odds stayed lofty.

• Tariff truce deadline looms: The 90‑day U.S.–China pause ends Tuesday, keeping trade risk on the tape. → CNBC


• Deficit widens despite tariff revenue: CBO reports a $1.6T YTD gap; customs duties jumped, but spending jumped more. → Fox Business


• Gold miner output climbs: Barrick’s Q2 showed higher production and a dividend hike, supporting the complex. → Seeking Alpha

📈 Daily Performance Snapshot

🔭 What to Watch Today

Rates, tariffs, and mega‑cap concentration are driving tape risk. Tomorrow’s CPI can validate a September cut—or take it off the table.

💡 Opportunity Watch

Policy noise and pricing power are reshaping factor leadership. Keep one eye on cash generation, the other on pass‑through.

• Energy infrastructure (EE): Guidance raised despite a miss—EBITDA visibility can outlast headline volatility. → Seeking Alpha
• Moat monopolies (CPRT, ASML, FICO): Dominant share plus pricing leverage can buffer tariff and rate shocks. → MarketBeat
• Treasury tech and cash yields: Real‑time treasury, pooling, and AI forecasting can unlock working capital now. → Global Finance

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🔥 The Big Bullet

U.S.–China tariff truce hits deadline as markets brace for CPI

What happened: Over the weekend into today, traders are focusing on a Tuesday deadline to extend the U.S.–China tariff pause, with no final decision from either side. The timing collides with July CPI, sharpening rate-cut odds and market sensitivity. The dollar and risk assets treaded water as officials hinted an extension is possible but not guaranteed. In short: policy uncertainty meets macro uncertainty at once. Markets are watching closely for any last-minute diplomatic moves, with whispers of back-channel talks in play. Equity futures show little conviction, underscoring the wait-and-see mood ahead of both headlines. → Reuters

Why it matters: If the pause lapses, higher tariffs could re-ignite supply-chain friction and add a mild inflation impulse just as the Fed weighs cuts. That mix can pressure margins for import-heavy retailers and hardware names, while boosting pricing power for select domestic suppliers. FX and rates could swing on headlines, with defensives and cash-rich balance sheets favored if volatility pops. The base case is a short extension—markets are pricing that—but positioning looks complacent.

What’s next: Watch for a White House statement on any 90-day extension and for CPI/PPI beats that could complicate it politically. Track moves in dollar/yen and semis; outsized swings would flag growth and policy jitters. For traders: consider keeping hedges on (index puts or tighter stops) and fade knee-jerk rallies into concrete policy news. If talks stall, expect near-term weakness in import-reliant sectors and a bid for staples and utilities.

• Pause on higher China tariffs set to expire Tuesday – AP
• Live: Markets track U.S.–China tariff deadline and talks – Yahoo Finance
• No extension yet as Stockholm talks wrap; deadline looms – Politico

🧭 Policy & Market Ripples

• Tariffs widen to South and Southeast Asia: New levies and transshipment rules cloud supply chains and price tags. → CNN
• Delta wing clip, no injuries: Ops hiccup in Atlanta; minor, but travel capacity remains tight this summer. → ABC News
• Immigration enforcement fight heats up: Hill scrutiny of activist groups rises; labor markets and compliance in focus. → Daily Signal
• India sentiment swings: Equity flows surge and retail chatter spikes as tariffs and boycotts jostle. → Stocktwits

📉 Today's Trivia

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