Good morning,
 
Yesterday the S&P 500 shrugged off a 5% decline in NVDA and the biggest espionage news since the Patriots spygate, gaining over 2%. Equity strength was very broad as the equal-weight was inline and Russell 2000 outperformed, climbing over 3%. Every sector was higher, led by the AI ecosystem and cyclicals as Consumer Discretionary, Industrials and Tech sectors paced gainers. The post-election selloff and tech bludgeoning last week has seemingly reset positions at the same time the market moves past election uncertainty and macro headwinds turn. Oil continued to fall, helping the move, and the Dollar weakened as well while yields were mixed- the 2y rose but the long end was flat.
 
S&P futures were around unchanged and in a tight range ahead of the CPI data today. Oil was lower again after President Trump reiterated that renewed strikes on Iran are “quite unlikely” and called the talks with Qatar’s prime minister “excellent”. There’s been some reporting on a preliminary agreement on nuclear concessions, control of the SOH and frozen assets, though Rubio’s latest comments said Iran’s demands were “unacceptable”.  Futures moved a little lower and yields higher early this morning after Fed governor Waller provided some CPI foreshadowing, along with the most specific commentary around monetary policy in some time at a Bank of England event. Waller said he would support a 25bp hike in December and potentially a 50bp increase if today’s CPI was at 0.3% or above. He added the Fed probably needs to reverse the 3 insurance cuts from last year at a minimum and that hiking only 25bp in this cycle risks losing credibility. Which brings us to…
 
Core CPI hit Waller’s 0.3% threshold and futures immediately sold off while yields and the dollar headed higher. Consensus was expecting core to rise 0.2%, and the 0.3% this month was inline with last month. Headline rose 0.4% versus a 0.3% expectation and 0.6% last month as Energy prices fell while Food prices rose 0.5% versus September. S&P futures are down 0.5%. Tech and AI infrastructure stocks are the biggest pre-market decliners- GEV, COHR, VRT, MRVL down 5%-plus.
 

 
Treasury yields jumped on the data, with the 2y up 10-plus bp and the Dollar moving higher as well. Fed hike expectations for December have begun pricing in a 50bp move (14% currently, up from 0% yesterday).
 

• US 2yr +11bps to 4.69%, 5yr +8bps to 4.77%, 10yr +5bps to 4.94%, 30yr +3bps to 5.31%
• USD index: +$0.39 to $101.92

 Anthropic’s IPO remains on track for next week but the company added some more drama to the situation yesterday, reportedly sending out an inaccurate offering document to bankers before filing an updated S-1 this morning. The company will offer 825M shares between $70-$78, raising $61.05M at the mid-point. AMD, AVGO, GOOG, MU, MSFT, NVDA, TSMC have agreed to purchase $26B of non-registered Class N shares in a concurrent private placement at the IPO price.
 
Major European indices are up around 1% and largely shrugging off the US futures move. The UK is lagging. Banks, tech and miners are leading the way and Energy is lower. Japan’s Nikkei followed up yesterday’s 2% bounce with another 2% gain overnight. South Korea didn’t take part in yesterday’s rally but joined today as the KOSPI jumped ~4%. Chinese equities saw more modest gains. China’s October trade surplus was lower than expected but surpasses $1 trillion for the second straight year.
 

 
Commodities have moved lower post-CPI. Oil continues to fall on Trump’s latest remarks, down another 3% today and 20% since the October 30 high. The January Brent contract is testing sub-$90 and its 100d ma. Precious metals were modestly lower and weakened further on the print as yields and the Dollar firm. Ag is slightly higher and crypto is seeing more pressure, down again with Bitcoin below $75k.
 

 
Earnings:

• After-Market: AAON, ACHR, AMRC, ASTS, BETR, BKKT, BTGO, BW, CNNE, CWEN, CWST, DJT, EQPT, GSHD, HIMS, HRB, KMPR, LCID, MARA, OXY, QLYS, QUBT, RKLB, SANM, SECZ, SKYD, TTD, TTWO, USAR, ZETA, ZIP
• Pre-Market (Tues): AP, BTDR, LAR, MCFT, ONON, SBH, SE, TDG, VG, WYFI
• After-Market (Tues): ALC, AZTA, BGS, BV, CRWV, ENS, FOSL, GO, MRCY, PBR, PETS, REZI, RGTI, SONO, STUB

 
Economic Data:
US:

• CPI m.m: 0.4% vs 0.3%, prior 0.6%
  • Core: 0.3% vs 0.2% cons, prior 0.3%
• NFIB Business Optimism Index: 97.8 vs 97.7 cons, prior 97.9
• ADP weekly employment: 19.75k vs prior 16.75K
• Fed Speakers: Waller (4am), Logan (9:35am), Bowman, Schmid (1:30pm)
• 11am Household debt
• 11am WASDE
• 12pm EIA Short Term Energy Outlook
• 1:00pm 10y auction
• 4:30pm API crude inventories

 
Global:

• China Trade Balance: $105.3B vs $125.8B cons, prior $133.53B
  • Exports y.y: 35.2% vs 33.5% cons, prior 36.3%
  • Imports: 41.6% vs 32.0% cons, prior 31.0%
• France Unemployment: 8.2% vs 8.4% cons, prior 8.3%