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DSMMA Morning Brief
07/27/2026

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EXECUTIVE SNAPSHOT

POSTURE: Constructive into a major earnings and Fed week, with strong earnings momentum offset by uncertainty around the Fed’s response to oil-driven inflation fears.

Earnings remain strong, forward guidance has been better than expected, and this week will provide important data on the broader path for big tech and AI growth. The market is heavily positioned for a hawkish Fed, which leaves room for a dovish surprise if the Fed pauses without coming out aggressively against oil-driven inflation.

Stocks remain supported by earnings momentum, while bonds are extended to the downside on inflation fears that are not yet supported by the underlying data. Lower oil prices would be positive for equities and bonds, negative for the dollar, and supportive of broader risk sentiment.

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MACRO

Massive earnings week, mixed with the Fed decision on Wednesday. A lot of weeks, the Fed decision seems exciting, but the market has already priced in the outcome. This week, many are calling for a 50-basis-point hike and see the Fed’s credibility as being at stake.

The oil spike is fading again as more peace talks get underway in the Middle East. While a hike remains unlikely, especially a 50-basis-point one, there is a runway for earnings to continue coming in strong. That creates the potential for a “dovish” surprise mixed with great earnings, which would be positive for stocks, negative for the dollar, and provide an overall boost to bonds from extended downside levels.

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EQUITIES

Stocks are on pace for another fantastic earnings season. There has been no deterioration in growth, forward guidance has been great, and while it is still early, the percentage of beats and raises is better than expected. This week will give us plenty of data to project the overall earnings path across the big tech companies and the future of AI growth. It is very unlikely that we are at the end of this bull run until we see a flip in earnings momentum.

The main issue the market is worried about is expanding capex, mixed with a slight but growing fear of dwindling buyback pressure. Similar to the interest rate spike that was supposed to normalize equity valuations but never did, the buyback issue will likely be treated the same way in the short term. The fact is that markets find reasons to look past these factors. From QT being the death of equities to rates going from 0% to 5%, all of these things were supposed to put us into long-term bear markets, but did not.

It is not positive to remove a non-price-sensitive buyer, but the effect will likely be less relevant in the near term and a larger issue for long-term price movements over an 18-plus-month timeframe.

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BONDS / RATES / FX

Bonds have been sold at every opportunity based on unjustified inflation panic. We are not heading into a long-term inflation backdrop, at least if you look at any of the forward projection curves or the inflation statistics themselves. This is all based on fear of one, which could turn out to be true, but it is not in the data itself.

Core metrics are falling, and it is oil that turned the base numbers. Oil is down 7% this morning, but could just as easily be up 7% tomorrow. Regardless of the fact that it is transitory by its very nature, that does not change the central banks’ attention to it. Just like the BOE hike because of the oil spike, it would be entirely logical for the Fed to also ignore its own research and hike into a supply-driven problem. Interest rates have zero effect on oil supply... they also will not change anything with the Iran war.

I do not expect the Fed to hike rates this week, but I could see a hike at the next meeting. For now, the market is expecting a hawkish pause, with many trying to call a hike or even a 50-basis-point move. That opens the door for a "dovish" surprise if they do not come out guns blazing.

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COMMODITIES

Oil is falling, but it could just as easily spike tomorrow on a Truth Social post. Trading it is 100% headline-driven, and if you have fast and accurate news feeds, this is a great time to trade it directionally. However, if you are just trading technicals or macro, this is not the time to start a position. It is news-driven.

Gold has been holding in well, but that is only due to how badly it has been trading for months. We have talked about buyers showing up every time it moves below $4,000, and we still feel like that is value from a longer-term investment perspective, but momentum has only shifted from extremely bearish to a neutral bear.

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CRYPTO (BTC)

As long as overall risk sentiment remains positive, BTC can continue its mini-breakout from $63,000. A push into the 200-day average remains the likely spot for people to take profits, so running toward that level and scaling out into it is the desired course of action. I still do not believe the bear market is over, but near-term momentum is positive if stocks remain bid this week.

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Disclaimer: The information provided here is for educational purposes and should not be considered financial advice. Markets carry inherent risks, and past performance does not guarantee future results. Please conduct your own research or consult a financial professional before making investment decisions.

All opinions are my own. **I am not a professional.** Please trade responsibly

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Good luck and God Bless!

- Nik "The Carny" Lentz