Following up the Punch Bowl: thoughts from the Morgan Stanley investor conference, Lennar earnings, perspective on the inflation data and the FED

1. Core PCE inflation data reveal a troubling trend. 2. Micron (MU) earnings indicate a durable shortage for memory. 3. The implications of an inflationary boom.

In this episode, Scott Slayton, Partner and Chief Strategist at Capital Creek Partners, breaks down three key market themes for the week. Scott begins with May core PCE, which printed in line at 3.41% but masks a troubling trend higher, as services and accelerating supercore inflation point to a likely Fed hike and reinforce CCP's underweight on U.S. fixed income. Additionally, he analyzes Micron's blowout quarter, arguing the real story is a structurally durable memory cycle, with 85% gross margins and supply sold out through 2028 making memory the new oil. Lastly, Scott delves into the implications of an inflationary boom, framing the pullback as a summer correction while reiterating a neutral S&P 500 rating and 7,420 target.

14 Point Plan, The Fed, and Retail Sales

In this episode, Scott Slayton, Partner and Chief Strategist at Capital Creek Partners, breaks down three key market themes for the week. Scott opens with the 14-point memorandum of understanding to end the US-Iran war, signed Wednesday. He walks through the points that matter most for markets, including the full reopening of the Strait of Hormuz within 30 days, $300 billion in reconstruction funds, the lifting of sanctions, and roughly $100 to $120 billion in unfrozen Iranian assets. While he views the deal as reasonable but tilted toward Iranian interests, and the 60-day timeline as unrealistic, he explains why the restored free flow of petroleum, fertilizers, and gas through Hormuz is bullish for equities and bonds but bearish for oil, gold, and commodities, where Capital Creek is overweight and rethinking its thesis. Next, Scott analyzes the June Fed meeting and the hawkish debut of the new Warsh Fed. He highlights a terse statement focused squarely on price stability with no mention of maximum employment, nine dots signaling a hike as the next move, and a core PCE forecast for 2026 that jumped from 2.7 to 3.3 percent at the midpoint of the year. Scott reflects on how clearly and repeatedly Warsh committed to delivering price stability, ties it back to Capital Creek's "punch bowl" thesis, and argues that a hard money central banker who is also an adroit politician is a powerful combination and a longer-term positive for markets and consumers. Finally, Scott turns to May retail sales and the resilient consumer. Focusing on the control group for its higher signal-to-noise ratio, he notes the upside surprise, the fifth consecutive monthly increase, and an upward revision to April. He explains why consumers keep spending despite the war, high energy prices, tariffs, AI-related job fears, and generationally low confidence, and what the strength implies for second quarter GDP, second quarter earnings, and the inflation risks now favoring the Fed's hawks.

Following up the Punch Bowl: thoughts from the Morgan Stanley investor conference, Lennar earnings, perspective on the inflation data and the FED

In this episode, Scott Slayton, Partner and Chief Strategist at Capital Creek Partners, breaks down three key market themes for the week. Scott recounts the Morgan Stanley Financial Services Conference, highlighting a spending super cycle and dismissing fears over private credit. He then assesses Lennar's earnings, noting a depressed housing consumer but contrarian signals near cyclical lows. Lastly, Scott reiterates his punch bowl thesis amid mixed inflation data.

Removing the Punch Bowl, The Case For Tighter Monetary Policy

In this episode, Scott Slayton, Partner and Chief Strategist at Capital Creek Partners, breaks down three key market themes for the week. Scott opens with a contrarian case for Fed tightening, arguing that a rate hiking cycle beginning later this year is more likely than markets are pricing. He points to a two-year Treasury yield sitting roughly 60 basis points above the fed funds rate, a confirmed uptrend in the ECRI Future Inflation Gauge, the stimulative effects of the Iran war, and a Taylor Rule calling for meaningfully tighter policy making the case that the Fed risks falling behind the curve before inflation forces their hand. Scott then turns to Broadcom's fiscal Q2 2026 earnings, using the results as a lens on the AI CapEx cycle. Full-year AI semiconductor revenues are tracking toward $56 billion up 180% year over year with management guiding for revenues well above $100 billion in fiscal 2027 and expressing high visibility through 2028. A book-to-bill ratio approaching three and accelerating average selling prices reinforce Scott's view that the AI infrastructure boom remains firmly intact. Scott closes with the May nonfarm payroll report, which came in at 172,000 nearly double the Street's consensus of 88,000 with April revised sharply higher to 179,000. The three-month average now sits at 188,000, well above the Fed's estimated equilibrium. Scott frames this as a labor market that continues to run hot and notes the report sets up Chair Warsh's first FOMC meeting on June 17th as one to watch closely.

Global Yield Shock

In this episode, Scott Slayton, Partner and Chief Strategist at Capital Creek Partners, breaks down three key market themes for the week. Scott digs into first quarter 2026 earnings, which posted a headline growth rate of 28.4% year over year but were flattered by over $50 billion in AI-related investment gains from Google and Amazon, making the adjusted growth rate closer to high teens which is still very strong, but less euphoric than the headline suggests. He then unpacks the global yield shock sweeping G20 bond markets, driven by warflation from the Iran-US conflict pushing food and energy prices higher in tandem, with Japan leading the backup after its 30-year yield hit 4.2%, the highest in over three decades, while China stands alone with falling yields and a massive borrowing cost advantage. Lastly, Scott walks through Walmart's fiscal first quarter earnings and what they reveal about inflation and the US consumer, highlighting that average gasoline fills have dropped back to 2022 levels and that management warned directly: if the Iran war persists, expect higher inflation for the remainder of 2026.