Evening Memo | Below‑consensus PPI eased yields; earnings set tomorrow’s focus
• After hours: United beat and raised guidance but warned large fuel headwinds. • Tomorrow’s trade ideas: focus on airline and broader earnings reactions to cost guidance.
What Moved Today
Market Recap — The June final-demand PPI fell 0.30% m/m, driven by a sharp energy drop, which eased near-term tightening pressure and pushed yields lower ($ZN=F) while supporting equities ($SPY). Regional manufacturing strength in the Empire State survey and Fed comments kept the dollar and rates in play ($DX=F). EIA data showed crude and gasoline draws but a distillate build, tightening prompt petroleum balances ($CL=F). After the close United reported an EPS beat, raised full-year guidance, and flagged roughly $6bn of extra 2026 fuel expense ($UAL).
Intraday — Morning headlines combined the PPI miss, a stronger-than-expected Empire State index and a mixed Beige Book to create a cross-market reaction: lower Treasury futures ($ZN=F) and firmer broad equities ($SPY) as the dollar oscillated ($DX=F), while EIA inventory draws kept oil futures supported ($CL=F).
After Hours — United’s Q2 beat, higher full-year EPS range and a nearly $6bn fuel increment drove late trading in airlines and energy-linked names, putting pressure on airline peers ($UAL) and thematic aviation exposure ($JETS) while underlying crude remained a reference point ($CL=F).
Our Read — Lower headline PPI removed some immediate rate-upside, setting a friendlier tape for risk into earnings. Tomorrow’s reactions will center on whether company-level cost comments (notably fuel) dent the relief.
