Inflation softened a bit in June, during the “peace is breaking out” lull in the war, so those CPI numbers came in as somewhat encouraging this week… and the banks are making beaucoup bucks, both because they’re still earning a decent interest margin and because, for the ones who have investment arms, trading volume has been bonkers and IPO fee proceeds have been huge.

The big questions for the immediate future are still: what happens to oil prices, which percolate through the global economy; how tapped out are US consumers, and will they keep spending; and what will the Fed do with short-term interest rates?

We have definitive answers for none of them, but I do expect that the President and Congress will do whatever they can to make things look rosy in the next few months, as midterm electioneering picks up in earnest. We’ll just have to see if that’s enough to support the stock market, which will get more challenging because there are some initial signs of the AI infrastructure/semiconductors trade rolling over a bit, with fears about the “overbuild” and CapEx investments percolating again, and with the biggest and third-biggest IPOs of the year both faltering and trading below their IPO prices (that’s SpaceX (SPCX) and Cerebras (CBRS) — number two in the list is just a week or so old now, the ADR for Korean memory maker SK Hynix (SKHY), which was the largest foreign company IPO ever, that one has been super volatile but is currently above its $149 offering price).

We’ll get a lot more intel on the AI infrastructure world when the hyperscalers begin to report, so sentiment could change dramatically as we hear from Alphabet (GOOGL) next week, and then Amazon (AMZN) and Microsoft (MSFT) the following week… but for now, the worry seems to be about how much those big companies are borrowing and whether they’re spending too much… but also whether they’ll keep propping up the economy and squeezing out other kinds of potential infrastructure and construction investments with their massive data center investments. (An oversimplification:  want housing prices to come down?  That means we need more homes, and homebuilders can’t easily compete for labor and materials, let alone growth capital, when data center building projects are paying top dollar and sucking the oxygen out of the room).

I think the most likely outcome, once this war washes through the ...