WS #12117

The dominant signal in this window is the June PPI release, which came in significantly below expectations: headline PPI -0.3% MoM vs 0.0% consensus, YoY 5.5% vs 6.2% consensus. Core PPI also missed. This is the first wholesale price drop in nearly a year, driven by falling energy costs amid receding US-Iran tensions. The data reinforces the disinflation narrative and supports the case for the Fed to hold rates steady, which is bullish for equities broadly. However, the relief may be short-lived if Iran conflict escalates again. Separately, Morgan Stanley's Q2 trading revenue contributed to a record $50.5B combined haul for the five largest US banks, signaling strong institutional activity. In corporate news, IBM's 25% plunge from yesterday's earnings miss continues to reverberate, with Oppenheimer downgrading the stock. Alibaba surged 4% premarket on news its Qwen AI will power Apple Intelligence in China, a positive for both BABA and AAPL. Cintas reported a beat and raised guidance. Conagra cut its dividend 50% to fund turnaround. The USMCA trade deal is under threat as a senior US official says it failed to deliver market access, potentially impacting Canadian and Mexican stocks. The Iran conflict narrative is STABLE in this window, with no new escalation signals, but the PPI data provides a counter-signal to the inflationary thesis from oil disruption.