In this July 16, 2026 market‑commentary video, Kenny Polcari opens with a breezy Cape Cod backdrop before diving into a detailed recap of the latest U.S. economic data, Federal Reserve expectations, market performance, sector rotation, earnings reports, and geopolitical developments. He notes that both the Producer Price Index (PPI) and Consumer Price Index (CPI) came in better than forecast, easing inflation concerns and prompting the CME FedWatch to cut the probability of a September rate hike to roughly 17 % (down from 47 %). The major indices posted modest gains (Dow +150, S&P +29, Nasdaq +162) while the “Mag 7” mega‑caps surged 2.3 %. Polcari highlights that oil prices have rebounded to about $80 a barrel after a recent dip, driven by renewed tensions with Iran and threats to the Strait of Hormuz, and warns that sustained higher energy prices could reignite inflation pressures. He reviews the Beige Book’s “slight‑to‑moderate” growth and unchanged employment, and points out that businesses are citing both the Iran conflict and tariffs as cost pressures. Sector flows showed money moving into financials, consumer discretionary, consumer staples, communications, and real‑estate, with a rotation out of technology; specific earnings highlights include BlackRock, BNY Mellon, Morgan Stanley, Johnson & Johnson, Elevance Health, UnitedHealth, GE, UBS, Abbott, Prologis, and State Street, noting where results beat expectations and where investor sentiment remained cautious. Bond markets saw yields dip modestly (2‑year at 4.15 %, 10‑year at 4.57 %), keeping a “short‑term lid” on equities. He previews today’s economic releases (retail sales, business inventories, pending home sales) and the mixed futures action. Polcari ends with a personal touch, sharing a simple summer recipe for cacio e pepe with fresh figs, and offers a free risk‑assessment call for viewers.
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Well, good morning. It's me, Kenny Polcari, your host of the party. And today is another glorious day down here in Cape Cod. You see the tide's coming in, the sky is blue, the sun is out. It is gonna be a beautiful day. But here are the things you need to know on July 16th, 2026. Well, the PPI came in better even than the CPI, so that was exciting. Earnings, well, they continue to prove that good just may not be good enough. Warsh appears in front of the Senate Banking Committee for a second day of testimony. Oil is steady, gold is down, bonds are up, and yields are down a little bit. What do we have at dinner tonight? We have the cacio e pepe con fichi. It's with figs. It is delicious. Okay, well, yesterday the market put in another mostly strong rally as investors got exactly what they wanted— another inflation report that came in better than expected. And you would think that it took the pressure off of any rate hike possibility. Well, you'd be correct, right? The CME FedWatch is now predicting only a— or projecting only a 70— 17% chance of a September rate hike versus the 47% chance that it was yesterday morning. And that helped the mood yesterday. But understand one thing: a hike is still on the table. It just got pushed out till January of 2027. Now, the Dow rose 150, the S&P was up 29, the NASDAQ rallied by 162 points, the Russell was up 11, the transports lost 120 gained 28 points. The Equal Weight lost 16 points while the Mag 7 gained 810 points or 2.3%. Yesterday's PPI followed Tuesday's CPI and it surprised once again to the downside, reinforcing idea that inflation continues to cool. The message clear: while inflation isn't disappearing, it isn't accelerating the way many feared it would be just a couple of weeks ago. Now, core CPI rose at 4.7% year over year. Below the 5.1% expectation, but a bit higher than the downwardly revised level last month, which came in at 4.6%, suggesting that despite the headlines coming out of the Middle East, underlying inflation pressures continue to moderate. Look, oil spent most of June collapsing, falling nearly $30 a barrel from its high. That decline helped lower transportation costs, eased pressure on manufacturers, and provided a welcome tailwind for the broader economy. Offsetting inflation elsewhere. But that decline may prove to be only a temporary reprieve, not a permanent trend. Remember, oil has since reversed course over the past week and is once again higher. The US has increased pressure on Iran after Tehran has, Tehran has refused to negotiate in good faith. They continued threatening commercial shipping, and they've effectively once again tried to close the Strait of Hormuz.. As a result, crude is now trading near $80 a barrel. That's roughly $13 above the levels that we saw a week and a half ago. And here's the important point: those higher energy prices are not reflected in what we just saw, the June CPI and PPI, uh, that we just received, right? If oil remains up here at the $80 level or higher, uh, over the coming weeks, the inflation story could begin to change once again. And that doesn't necessarily mean that the Fed or the market has to panic. In fact, we saw the chance of a September rate hike fade. Now, history tells us that the supply shock inflation, which this is like the one that we're in right now, usually fades once supply normalizes. And we started to see that a couple of weeks ago. Demand-driven inflation, on the other hand, tends to be much more sticky and persistent because it's fueled by a strong economy and robust consumer spending. But let's be clear, while the economy is strong and the consumer seems to be fine, it is not the reason for the spike in oil. So while the better than expected CPI and PPI reports are certainly welcome news, investors shouldn't assume that the inflation battle has been completely won. So we'll talk about that in the days and weeks ahead. If the conflict drags on and energy prices continue climbing, yesterday's encouraging inflation report may ultimately prove to be nothing more than just a blip on the screen. Now, yesterday also gave us the Fed's Beige Book survey, which details the conditions across the country, broken down into the 12 regions of the Federal Reserve banks around the country. And what did it show? Well, slight to moderate growth, little change in employment. And this is the tell, really, that businesses are openly citing both the Iran conflict and tariffs as cost pressures in the same breath, something that we all knew. So that's not new news. So now we'll go back to Capitol Hill. Humphrey Hawkins testimony. Well, that continued. Kevin Walsh appeared in front of the Senate Banking Committee to give them an update on the state of the economy and the mindset at the Fed. Now, he continues to make it very clear that the Fed remains an independent bank because they keep asking. And he responds saying that they chose an independent guy to run an independent job. Now, he's only one month into it, I understand. So we can revisit that in the fall and see how it's all working out. In any event, I like him and I like his style. And I discussed it yesterday with Liz Clayman on the Clayman Countdown on Fox Business. You can see that video on my Twitter feed @KennyPolcari. It's also in the written note. You can go in there and click on it. The link is in there to see it if you get the written note. So where did the money go yesterday? Well, we saw money rotate into the financials, into consumer discretionary, into consumer staples, communications, and real estate. We saw money rotate out of Technology. It's interesting because the Mag 7 was up big, right? But the XLF took a hit, losing 1.1%. Semis got slammed, falling 2.2%. Cybersecurity down 1.7%, while the memory names got smashed again. The DRAM ETF, which is the memory ETF, lost 6.25%. We also saw weakness in utilities and energy. Apple, a name that couldn't have gotten thrown out fast enough in June after they announced price hikes, sending the stock down 13% over 2 weeks, made a new all-time high yesterday after they received approval from China to roll out the iPhone with Apple intelligence. Although the version that they approved has to be modified a bit to, you know, to satisfy the Chinese. But the stock rose $12 yesterday to end the day at $327.50 and is now up 19% off that June low. Earnings continue to separate the winners from the losers. BlackRock beat expectations across the board, saw assets under management climb to above $15 trillion, and investors rewarded the stock accordingly, taking it up 6.6%. Bank of New York and Morgan Stanley also turned in strong reports confirming that trading activity and wealth management and capital markets remain healthy despite all that uncertainty. That's what I discussed yesterday also with Liz. Those names edged higher, up 5.1% and up 0.3% respectively. On the other hand, Elevance and J&J reminded investors that good, ah, maybe isn't good enough. Johnson Johnson topped earnings and revenue estimates. They delivered solid pharmaceutical growth and even raised their full-year guidance. Elevance Health also beat earnings and revenue expectations. They reported better-than-expected medical costs and increased their full-year guidance. Under normal circumstances, those results would have been enough to send those stocks sharply higher. But instead, investors focused on what could go wrong, questioning Johnson Johnson's medtech growth and worrying about the future Medicaid costs at Elevance. As a result, both of those stocks ended the day lower. Johnson fell 2.6%, Elevance lost 8.8%. Earnings today include UNH, GE, UBS, Abbott Laboratories, uh, Prologis, and State Street. And these companies represent managed care, aerospace and defense, banking and wealth management, medical devices, and industrial REITs. Now UNH already reported this morning and they crushed it. The stock is quoted up $30 in the pre-market. Overnight, guess what? Taiwan Semi reported and they crushed it. They beat on revenue, 68% margins. They raised their full-year guidance. They're going to spend more on capacity expansion, raising their CapEx by $8 billion. And the stock is quoted down $16 in the premarket. Bonds caught a bit, a small bit again yesterday. The TLT was up 2/10. The TLH was up a quarter of a percent. As a result, yields did move a bit lower. The 2-year is now yielding 4.15%, down from 1.7%. The 10-year is yielding 4.57%. That's down just from 4.58%, while the 30-year remains anchored at 5.10%. Yields still remain in the danger zone, and that's surely going to keep a short-term lid on stocks. So that makes me a little bit cautious. Gold continues to bounce around between $4,000 and $4,200. Uh, this morning it's down $26 at $4,033, so it's right in there. Economic data today includes, uh, advanced retail sales expected to come in up 0.2%, ex-auto and ex-gas and autos up 0.4%, business inventories up 0.3%, and pending home sales which are expected to be down 0.5% month over month. European markets are all lower this morning, down between 0.4% and 7/10 of a percent. US futures are confused. Dow futures up 100, the S&P's down 9, the NASDAQ's down 166, and the Russell is down 12. The S&P closed at 7,572, up 28 points. Now we've been stuck in this kind of 7,480, 7,580 trading range for a couple of weeks now, bouncing back and forth. Trendline support is down at 7,454. The upside target is the all-time high at 7,620. I think we continue to churn right in here, at least, uh until next week. You can give me a call at 561-931-0190 to discuss your goals, your timeline, your risk assessment, and your volatility that you're willing to put up with. And as usual, I'm always ready to give you a free complimentary risk assessment review. Okay, what do we have at dinner tonight? Well, it's a cacio e pepe con fichi. Fichi are figs. It's a great simple summer dish because you're going to use the fresh figs. For this, you need the pasta. You're going to use either a tonnarelli or bucatini. You need fresh figs, fresh grated Pecorino Romano, cold water, pepper, pepper, butter, and olive oil. You're going to bring a pot of salted water to a rolling boil, leave it there on the back burner. You're going to slice the figs like in quarters, cut them in half and cut them in half again, and then sauté them in a little bit of butter and olive oil, uh, you know, just on the sides that you, that you cut open, right? Set those aside. While the pasta is cooking, you're going to add the pecorino, the fresh grated pecorino, to a bowl. You're going to hit it with some pepper and cold water to make like a paste. When the pasta is done, add it to the sauté pan, add the figs back in, Now add the pecorino paste and a little bit of the hot pasta water just to loosen it up. Mix it well. It's gonna turn all nice and creamy. You wanna serve it immediately and make sure you top them. Get some of those sautéed figs right there on top, and you can drizzle some more of the sauce right over it. It is simple. It's delicious. It's a great summer dish because they're fresh figs, and what's better than fresh figs on a gorgeous day like this? Actually, I think I'm gonna make that for dinner tonight. Until tomorrow, take good care.
