WS #13050

The U.S. economy grew at a weaker-than-expected 1.5% annualized rate in Q2 (consensus 2.1%), while core PCE inflation for June came in at 3.3% (in line) and the Q2 core PCE price index was 3.4% vs 3.5% expected. This stagflationary mix reinforces the Fed's dilemma: growth slowing but inflation still elevated. The Fed held rates steady yesterday with three dissents favoring a hike, and the 30-year yield hit a 2007 high. Meta (META) premarket -10% after weak guidance, dragging tech sentiment. Berkshire Hathaway is reportedly acquiring Taylor Morrison for $6.8B, a bullish signal for homebuilders. IRGC claims destruction of 3 F-35s at a Jordan base (unconfirmed), and two oil tankers turned back from Strait of Hormuz after one caught fire, escalating Middle East risk. Israel and Hamas signal progress on Phase 2 ceasefire with disarmament terms. Russia adds Telegram founder to terrorist list. Ukraine strikes major Russian oil refinery. On earnings, Mastercard (MA) beat Q2 estimates, InterDigital (IDCC) crushed estimates and raised guidance, Ferrari (RACE) raised guidance, Huntington Ingalls (HII) beat and raised, while Carvana (CVNA) fell on results. The dominant macro theme is ESCALATING stagflation risk with geopolitical overlay, while tech faces headwinds from Meta's disappointment ahead of AAPL/AMZN earnings tonight.