Craig Shapiro

We launched our free newsletter today over at @NTLiveMedia called "The First Print." Sign up link below to get daily insights from me, @chigrl @AnthonyCrudele and @NinjaTrader_Jim Watch. Learn. Execute. ninjatraderlive.com/newsletter?utm…

@MarkKahn2 Very proud. She's incredible. Today intern. Tomorrow? Could be on the other side of the desk

@ces921 Congratulations, you should be (and clearly are) very proud of your daughter.

This was a live look from inside the hearing room of Fed Chair Warsh's first testimony to the House taken by my daughter Hailey who is interning on Capitol Hill. She witnessed history today which was a Fed chair who is ready to deliver no unexpected news when speaking publicly

@dmactrades No doubt. She's has incredible access to the halls of power all summer.

@ces921 Forgetting Warsh for a moment, what a great start to a new and exciting chapter for your daughter!

@EquitOrr Seems like it. Less is more

@ces921 Congratulations...proud dad moment! Isn"t Warsh doing what Fed chairs used to do pre ZIRP? Ie Greenspan.,,,"if I have been unduly clear....I have been misunderstood"

@LboysB21 No doubt. She's got that civic duty gene in her

@ces921 proud papa

*WARSH: 'MISSION ACCOMPLISHED' IS NOT MY VIEW AFTER TODAY'S DATA Probably the only noteworthy thing he has said so far today

Warsh wants to look at trimmed mean measures of inflation to remove both kinds of outliers. For the June report, the 16% Trimmed Mean CPI down to 0.0% mom and back down to 2.6% yoy is something that Warsh is likely to use to really push back against hawkish members of the Fed at the meeting in two weeks.

@PipCzar @BlacklionCTA The real ridiculosity is having to listen to partisan Dems ask absurd questions that have very little to do with what Fed chair Warsh actually does

@BlacklionCTA I had to actually google that one too! 😂

Ridiculousity ? That's a new one thanks to Cong. Green. Always good for something like this.

@DsrPrivate @yaacov

MORNING MARKET BRIEF Tuesday, July 14, 2026 TL;DR 1/ CPI this morning is a binary: hot print likely pushes a July hike from tail risk to base case and breaks the gamma floor at 7500. 2/ Gamma support is real but increasingly conditional -- the regime is Fragile, not safe, and the corporate bid is absent during buyback blackout. 3/ IBM's capex pivot is a sector-wide warning, not an IBM story: enterprise clients are rotating to physical infrastructure ahead of supply constraints, and that cannibalizes software and services across the board. 4/ The Hormuz disruption is a multi-commodity shock -- helium, sulfur, and fertilizer markets are tightening in ways that don't show up in consensus CPI models but compound the inflation impulse directly into semis input costs. 5/ Don't lean on gamma flows as a sufficient offset to exogenous vol shocks when geopolitical risk is actively re-escalating. KEY THEMES Overnight developments are forcing traders to hold two contradictory thoughts simultaneously: the structural gamma support capping SPX downside remains intact, but the geopolitical and monetary policy pressures building beneath the surface are increasingly difficult for options flows to neutralize. Iran war escalation has pushed Brent above $87 and flipped the rates narrative sharply hawkish -- July hike odds are running at 43% and climbing, with Waller having already laid the groundwork and today's CPI print now functioning as a binary catalyst that could make a hike this month the base case rather than a tail risk. The commodity channel deserves equal attention: beyond crude, the Hormuz disruption is quietly tightening helium, sulfur, and fertilizer markets in ways that compound the inflation impulse and carry direct read-throughs into semiconductor input costs -- a sector already nursing wounds after SOXL's $6.5B forced rebalancing drove a sharp wedge between index-level drawdown and positive underlying breadth. For futures traders, the setup heading into the open is one of contested narratives: JPMorgan's record quarter and rebounding semis provide a credible bid, but IBM's 17% pre-market collapse on a capex reprioritization story -- clients pulling spend toward physical infrastructure ahead of supply constraints -- is a warning shot that the AI trade is bifurcating in real time, and a hot CPI print this morning could quickly overwhelm whatever structural gamma support remains above 7,500. MARKET SNAPSHOT Markets are in a holding pattern pre-CPI and pre-Warsh testimony, with the tape bifurcated -- semis bouncing after Monday's SOXL-driven rout while Brent pushing above $87 (one-month high) keeps rate hike probability elevated and sustains the oil-rates-dollar tension as the dominant cross-asset theme. European money markets now pricing at least one hike each from the BoE and ECB this year, with roughly 80% odds of a second by December, suggests the global re-tightening narrative is broadening beyond the Fed. MACRO Waller's hawkish pivot is the most important recent signal in the Fed reaction function. As the official most closely tracking the data-driven consensus, his shift materially raises the probability that today's CPI print, if firm, becomes the decisive trigger for a July hike rather than a warning shot. Warsh's prepared testimony will matter more than the Q&A given his well-documented aversion to forward guidance, but expect markets to trade any hawkish adjacency aggressively given the current 43% pricing. Separately, JGB yield softness is failing to provide the usual yen-supportive impulse, with the terms-of-trade hit from oil dominating -- watch for a potential yen recovery if the JGB outperformance proves durable and reflects genuine domestic investor home-bias rotation rather than noise. TS Lombard's call for up to five Fed hikes over the next year -- framed around curtailing AI-driven leverage buildup in a bifurcated economy -- is an outlier but directionally consistent with the repricing already underway. The key risk is that if the Fed treats AI-sector exuberance as a financial stability concern rather than purely an inflation mandate issue, the reaction function becomes harder to model and more aggressive than markets are currently discounting. Fed funds pricing has shifted materially hawkish: July hike odds at 43%, September cumulative probability at 77%, and year-end fully pricing at 90% with 43bp of tightening in the curve. The 58% probability of two or more hikes this year represents a significant repricing and is the direct transmission mechanism linking the Iran oil shock to front-end rates. The NFIB bounce to 97.4 is encouraging on the surface but masks a stagflationary undertow: the share of small businesses citing inflation as their top concern hit the highest since October 2024, net price-raising intentions have climbed for four straight months to the highest since early 2023, and the bounce itself was largely energy-relief driven -- a tailwind that has already reversed given this week's oil spike on Iran escalation. BofA card data for the July 4th week shows meaningful softening beneath the headline, with broad deceleration across discretionary categories once the Prime Day pull-forward fades -- restaurants & bars fell from +7.7% to +1.5% and clothing from +8.8% to +1.2%, flagging underlying consumer fatigue that Prime Day had temporarily obscured. More concerning is the expanding negative category count -- now four categories contracting y/y (department stores, furniture, grocery, home improvement), up from zero two weeks ago -- a signal worth watching as the summer spending season progresses. CORPORATE IBM's preliminary Q2 miss -- revenue of $17.2B versus $17.86B consensus, with consulting flat and infrastructure down 7% -- reveals a sharp late-quarter capex pivot by enterprise clients toward server and memory hardware ahead of anticipated supply-constrained price increases, essentially a pull-forward into physical infrastructure that cannibalizes software and services spend. The -14% premarket move reflects both the miss and the concern that this capex rotation is a sector-wide dynamic rather than an IBM-specific issue. The CEO's explicit callout of industry-wide cybersecurity distractions compounding the reprioritization adds a second independent headwind -- this is not a simple demand story but a client-attention problem that likely affected peers, making IBM a potential read-through for broader enterprise IT services names reporting this cycle. DeepSeek seeking fresh capital at a $71B pre-money valuation -- a 42% step-up from its June close -- just weeks after raising $7B signals that Chinese AI compute ambitions are accelerating rapidly, directly challenging the US chip export control thesis and adding a structural overhang to the narrative that export restrictions will meaningfully constrain Chinese AI development. Wells Fargo beat on fees (NII +13%, driven by VC gains and wealth management) while holding its full-year NII guide at roughly $50B -- a signal of stability in the rate-sensitive business, though the lack of a guide raise suggests management sees limited upside surprise from here on the interest income line. JPM's record Q2 profit -- driven by an 86% surge in equities revenue to $6.03B, a new all-time high for a single quarter -- underscores just how much volatility has become a profit center for the sellside. But Dimon's explicit caution around geopolitical tensions, sticky inflation, fiscal deficits, and elevated asset prices from the CEO of the most systemically important US bank carries weight and should not be dismissed as boilerplate. COMMODITY The Hormuz disruption is a multi-commodity supply shock, not just an energy story: helium (spot price estimated to have doubled since March, critical for semiconductor fabs with no easy substitute), sulfur (key phosphate fertilizer feedstock with Hormuz crossings again at a standstill since last week), and aluminum billet (persistent premium pressure despite logistical workarounds) all represent second-order inflation vectors that are largely absent from consensus CPI models and could sustain commodity-driven inflation well beyond what crude alone would imply. FLOWS AND POSITIONING SPX gamma structure remains constructive with GVT at +5.6, but the 7500 strike is the line in the sand -- a breach there shifts dealer hedging from supportive to neutral-to-negative, opening a path toward the 7450 support zone; upside is capped near 7600 with 7650 as outer resistance. Vol control funds have slowed their rebalancing cadence now that 1-month RV has dropped back below 3-month, which cuts both ways -- less systematic buying ahead, but also a higher hurdle (roughly 1.5% daily move) before meaningful deleveraging kicks in. The real story from Monday was the SOXL rebalancing dynamic: $6.5B in forced ETF selling injected a short-gamma impulse into an otherwise positive-gamma tape, which explains the disconnect between positive underlying breadth (55% of SPX names green) and index-level weakness -- the SOXL five alone accounted for nearly a third of cap-weighted negative contribution. With geopolitical risk re-escalating via Iran, do not lean on gamma flows as a sufficient offset to exogenous vol shocks. FLOWS REGIME ANALYSIS The regime shifts from Coiled to Fragile: the mechanical floor remains intact, but the weight of catalysts pressing against it has reached a point where structural support alone cannot carry the read. Dealers are long gamma with GVT holding positive at 5.6, providing a real but increasingly conditional backstop. The 7500 strike is the critical line: above it, dealer hedging flows remain broadly supportive; below it, that support becomes significantly less constructive and the structural bid thins materially. Expiry later this week adds a timing element worth watching, as peak gamma effects will roll off and leave the market less pinned when that positioning clears. The buyback blackout continues to strip out the corporate bid, meaning the structural support resting on dealer gamma and vol control flows is not being reinforced by the one mechanical buyer that could absorb headline-driven selling pressure. The semiconductor complex deserves special attention: while underlying breadth was actually positive yesterday, the SOXL rebalancing introduced more than $6.5B of forced selling that created a short-gamma dynamic inside an otherwise positive-gamma environment, driving a sharp wedge between index drawdown and true market health -- and that dynamic can repeat if semis see further pressure today. Vol control flows are still marginally supportive but the pace of rebalancing has slowed as 1-month realized volatility has dropped back below 3-month, and a move greater than 1.5% would be required to trigger meaningful deleveraging in either direction. Today's CPI print is the central binary: with July hike odds at 43% and climbing after Waller's groundwork, a hot print could push a July hike from tail risk to base case and overwhelm whatever gamma support holds above 7500, while a soft print offers relief and keeps the structural floor credible into expiry. Cross-Asset Divergence: Aligned on the stress side. The dollar's stable bid and crude's move above $87 on Iran escalation both tighten the financial conditions picture and amplify the hawkish CPI risk, with credit spreads stable but providing no active confirmation that conditions are easing into the catalyst. Positioning: Neutral to defensive bias with 7500 as the key intraday level. Avoid pressing longs into CPI with the corporate bid absent and semiconductor rebalancing risk still live. Invalidation: CPI prints soft and July hike odds fade, releasing duration pressure and reopening the path toward 7600; or SPX breaks and sustains below 7500, flipping the gamma profile less supportive and removing the structural argument for holding any long exposure.

And before 930am, @BarakRavid will reveal that Iran is begging to make a deal and Taco Tuesday with reign supreme again.

@INArteCarloDoss What does he care? He was already passed over for the Chair He is probably getting ready to resign soon so he can collect the big bucks by hitting the speech circuit and maybe some HF consulting.

I hope Waller understands that he will be the scapegoat for the Novembre mid-term carnage

While the Chinese government often is said to practice Capitalism with Chinese characteristics, the US government is increasingly finding itself practicing Socialism with American characteristics.

@DerivativesDon Under 7400 SPX and there will be a deal

@ces921 Wait, is there a deal?

The contents of this speech to the nation will be determined by where the SPX is on Thursday at the close.

Trade the Close at 2 PM ET. @JoeyMorganNQ, @LeoTheTiger + @jackgleason are live. 🔔 Tune in: youtube.com/watch?v=UwqMa3…

Fed's Waller getting more concerned that inflation is not going away quickly. Hot reading tomorrow suggests rate hike "near term" which could be as early as July

@RMConservative Nepotism is as nepotism does

Retarded

From last nights live stream on @NTLiveMedia $GC has hit downside target 2 which triggers the week down.