Good morning. In 1974, the New York Stock Exchange allowed women to join the trading floor for the first time in its 182-year history. Before that, it was strictly a men-only club.

That year, five women made history and the floor’s dynamic changed forever.

-Jonathan Kibbler, Shaun A, Jordon Mellor

MARKETS

How’s your favorite today?

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

MARKET ANALYSIS

Markets Are at All-Time Highs... Which Is Exactly Why I’m Nervous

The S&P 500 and Nasdaq have smashed through all-time highs yet again. On the surface, the market is very bullish, but when you dig into the drivers, it’s not all as bulletproof as it looks.

Market Conditions

CPI Stayed Flat at 2.7% - Inflation’s still above the Fed’s 2% target, which should be slightly bearish for stocks. But the market spun it as a win, no nasty surprises = rate cut hopes for September still alive.
Fed Cut Odds Are Through the Roof - CME FedWatch has a 94.4% chance of a September cut. Traders are basically betting the house that Powell’s delivering.
Tariff Truce Extended- Trump’s 90-day extension on the tariff truce with China has calmed nerves. Less trade tension is a green light for risk-on.

Market Sentiment Check

The Volatility Index or VIX is trading back below its 50 day moving average and the key 20 level. In these conditions the stock market is considered very bullish.

That brings me onto a couple of concerns though.

The Put/Call ratio which measures the overall expectations of market trends. It increases as investors lean on the bearish side and declines as investors become exuberant on stocks. If the 10-day average exceeds 1.1, the market is reaching a temporary bottom. Below 0.8 suggests that the market is moving towards a peak price. It’s currently at 0.89.

One misprint could rock the boat. It could just take one high inflation print to put the market on its backfoot. Participants may reconsider the Federal Reserves openness to cut rates, and the market may become volatile.

Seasonality Says… This Could Run

I was doing some seasonal research and found that over the last 25 years, August has been a bullish month for the S&P about 40% of the time (10 years out of 25).

You’re probably thinking why is he telling me this?

I did some further digging and in years when August is bullish, the price action tends to line up almost eerily with what we’re seeing in 2025 right now .

This year’s S&P 500 chart is tracking that bullish August composite fairly closely. If it follows a similar pattern then August could be a good month for the stock market.

My take

I like upside to the stock markets from a current sentiment point of view, and having some sesonal data backing it helps.

I just fear the market is getting ahead of itself. The one concern of inflation isn’t really coming in lower. What if it doesn’t?

-Jonathan Kibbler

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TRADER INSIGHTS

Traders Price In Three Fed Cuts

Cooler U.S. inflation has changed market expectations. July’s Consumer Price Index (CPI) came in softer than expected. Now, traders are betting on a Fed rate cut at every meeting left this year: September, October, and December.

The numbers look calm, but the situation is not. The tariffs President Donald Trump announced in April are still a risk. Their full impact on prices has not been felt yet. The question is whether this is a short-term slowdown or a real shift in inflation.

Here’s What You Need to Know and Why It Matters

1. Inflation was lower than expected

CPI in July rose 0.2% from the previous month. The annual rate is 2.7%, lower than the 2.8% forecast. That’s a small win for those hoping for a “soft landing.” But core inflation, which excludes food and energy, rose slightly more than expected. This is the highest since February. Prices are still under pressure.

CPI data is in: Consumer prices rise 2.7% annually in July, less than expected amid tariff worries. Excluding food and energy, the core CPI increased 0.3% for the month and 3.1% from a year ago, compared with the forecasts for 0.3% and 3%. Of course, it will be revised...
— #WWU Center for Economic and Business Research (#@PugetSoundEF)
2:25 PM • Aug 12, 2025

2. Tariff effects are not fully in the numbers yet

The impact of tariffs on consumers has been small so far. But the effect is delayed. Higher import costs could start pushing prices up in the coming months.

3. Goldman Sachs sees October as a risk month

Goldman’s chief economist Jan Hatzius sees October as a likely window when tariffs could finally show their teeth in CPI data. If that happens, the current market optimism could face a reality check. If that happens, it could change the market’s outlook fast.

Trump appears to be not very pleased with Goldman's Jan Hatzius, a well-respected economist on Wall Street who, notably, kinda predicted GFC in 2008

Hatzius's team, like most mainstream economists, has said tariffs would boost prices and slow growth

wsj.com/economy/trump-…
— #Ben Glickman (#@BenGlickman)
6:28 PM • Aug 12, 2025

4. Trump’s issues with the Fed add more noise

Trump has threatened legal action against Fed Chair Jerome Powell over building renovations. It is more political theater than a policy change, but it adds uncertainty.

5. Markets now expect three cuts

The CME FedWatch Tool shows traders expect the Fed to cut rates at all three remaining meetings in 2025. That is a big shift toward a dovish outlook. But when expectations lean too far one way, the risk of being wrong grows.

The takeaway

July’s CPI has pushed traders toward expecting multiple cuts. But tariffs, politics, and the risk of a hot inflation report are still in play. If you are betting on a dovish Fed, stay alert. One bad number can flip the story quickly.

-Shaun A

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