CHRIS VERSACE: Good morning, Action Alerts Plus members. As we look at today's market, stocks are reacting to the July CPI print that showed headline inflation-- one that includes energy prices-- coming in at 3.2% year-over-year, slightly better than expected, and core inflation also slightly better than expected at 4.7% year-over-year.

But-- but that is a tick better than expected, like I said, but still a ways away from the Fed's 2% target. However, what has the market trading meaningfully higher this morning is the sequential print for core CPI that rose just 0.2% compared to June. That's the second month at that level and far slower than what we saw in the January to May period. And it suggests that far more progress is likely to be had in the year-over-year inflation figures in the coming months.

However, we know the labor market remains tight, wage pressure looks to remain in place, and energy prices are ticking higher as well. Those forces may keep further meaningful progress on inflation in check. And it will keep us watching the data rather closely.

Meanwhile, recent economic data points to the economy growing above trend. Something that could also extend the Fed's inflation fight. To us, this increases the focus not so much on whether we have another rate hike in the coming months, but rather when the Fed is likely to start cutting rates.

Currently, the CME FedWatch tool shows the first rate coming in March. But barring upcoming data that shows more meaningful progress on inflation, the timing for those rate cuts is likely to get pushed out. This, to us, makes the upcoming August Flash PMI data must-watch data. And we can say the same for oil prices as well.

Now as we wait for that data to come together in the next week or two, we'll be keeping a close watch on our shopping list, which includes newer portfolio positions like McDonald's and Qualcomm, as well as existing ones like Trinity Capital, Universal Display, and Applied Materials. And again, we're not in a rush. We're going to look to pick these stocks up at the right price.

Now, let's turn to some individual positions. This morning, we learned the double digit increase was posted at Taiwan Semiconductor for its July revenue. This is something that we've been waiting for. And paired with recent comments from Qorvo, Skyworks, and even Micron, it supports the stronger second half of 2023 narrative for not only smartphones, but also data center that we've been talking about. That data out this morning bolsters our view on Qualcomm, Universal Display, and Marvell shares in the portfolio. And it also adds to our view that Qualcomm's guidance for the second half of 2023 is likely to be overly conservative.

Also, this morning, China lifted its ban on group travel to the US, Europe, and Asia. In our view, this bodes very well for a rebound in the very high margin travel retail business at Coty. Simply another reason for us to become incrementally bullish on those shares as well. And finally, we'll be watching Washington as President Biden asks for additional defense funding for Ukraine. We see that as a potential positive for our shares of Lockheed Martin.

Members, that's today's Daily Rundown. Thanks for joining us. We'll be back with another episode tomorrow.