1. A prominent billionaire warns of the possibility of the worst-case scenario for the U.S. economy; 2. Discusses why stagflation remains a plausible scenario for the U.S. economy; 3. Suggests top picks for navigating a stagflationary environment.

1. The article discusses the impact of inflation and economic data on the market, highlighting the Fed's potential interest rate cut and the upcoming election's influence on market sentiment. 2. It analyzes the resilience of corporate earnings and the potential for market volatility due to seasonal patterns and economic uncertainty. 3. The author emphasizes the importance of long-term investment strategies amidst short-term market fluctuations.

1. The Federal Reserve's balance sheet is crucial for monetary policy, potentially more influential than interest rates on money supply and inflation. 2. Quantitative easing (QE) through balance sheet expansion has significantly increased the money supply and inflationary pressures. 3. Despite recent reductions, the balance sheet remains substantially higher than pre-2008 levels, indicating limited impact of current reductions.

1. Market participants are overly optimistic about S&P 500's future operating margins, pricing it at 20.7 times forward earnings. 2. The potential for inflation resurgence due to the Middle East crisis and rising transportation costs is underestimated. 3. Investors are advised to underweight SPY in their portfolios due to these risks and overly optimistic market expectations.

1. Fed Chair Powell signals policy adjustments are needed, emphasizing concerns about labor market weakness. 2. Markets are pricing in a 34.5% chance of a 50 bps cut and 65.5% of a 25 bps cut at the Federal Reserve's September meeting. 3. US PCE and EU Inflation data are the highlights.

➀ Inflation has surpassed wage growth in multiple countries including Finland, Italy, Canada, Australia, Japan, the Czech Republic, Sweden, and New Zealand according to the OECD Employment Outlook 2024. ➁ Real wages have decreased by more than 5% in these countries, with Sweden experiencing a 7.5% drop. ➂ The United States saw a milder decrease in real wages at 0.8% in Q1 2024 compared to Q4 2019.

1. Next week, Wall Street's focus will shift to inflation data, including producer and consumer price indices. 2. The second quarter earnings season continues with major companies like Walmart, Home Depot, and Alibaba scheduled to report. 3. IPO watch includes YXT.COM Group Holding expected to raise $50M.

1. AGNC reported slightly weaker than expected Q2'24 results, but its spread profile is improving due to growing interest income. 2. Inflation is moderating, and the Fed is nearing its 'pivot point', which could benefit AGNC's mortgage-backed securities portfolio. 3. Shares now trade at a 17% premium to the REIT's longer term (3-year) price-to-book ratio, suggesting a hold rating is appropriate for now.

1. Inflation is decreasing, but a recession is likely before the Federal Reserve cuts interest rates. 2. Investing in AGNC Investment Corp, a mortgage REIT yielding 14.6%, is beneficial during economic downturns and interest rate cuts. 3. AGNC's strategy of investing in agency MBS positions it well for capital gains when the economy recovers.

1. REITs have rebounded 25% due to expectations of Fed rate cuts, but still face challenges. 2. The REIT sector is sensitive to long-term interest rates and may not benefit significantly from short-term rate cuts. 3. Economic weakening and stagflation risks suggest investors should be selective in REIT investments, favoring defensive sectors like multifamily REITs.

1. The US economy has shown resilience despite aggressive tightening policies, but consumer fatigue and inflation pose challenges. 2. The Fed is expected to cut interest rates to sustain the recovery, balancing economic growth and inflation. 3. Equities, particularly in tech and AI, have outperformed, but market volatility is expected to increase as earnings face challenges and the Presidential election approaches.

1. Inflation easing may lead to a faster Fed pivot, benefiting PIMCO Dynamic Income Fund. 2. The fund has shifted to overweight high-yield credit since March. 3. Potential rate cuts could expand the price differential between net asset value and market price.

1. Inflation in the US cooled to 3.0% in June, the lowest level in a year. 2. Both headline and core CPI figures were lower than expected. 3. The Federal Reserve's target inflation rate remains at 2%, with current core PCE above this target.

1. The 10Y yield is in the 4.25-4.30% range, seeking a reason to decline. The CPI report will determine the direction, with expectations for lower yields. 2. Eurozone markets do not anticipate a rate-cutting cycle, contrasting with the US. 3. Services sector inflation remains a concern, needing further calming.

1. Over 26 million employees received more than 52 billion euros in inflation compensation premiums. 2. The premiums have stabilized the economy and reduced people's concerns. 3. The study indicates that the premiums have significantly contributed to financial relief, stabilized purchasing power, and improved trust in political institutions.