Market Hush, Chicago Rush

Last Week

All was quiet on the Wall Street front, as the S&P 500 added 0.36%, the Nasdaq Composite ticked up 0.14%, and the Russell 2000 gained 1.1%. The yield on the 10-year Treasury moved 4 basis points higher to 4.7%, the top end of its 20-year trading range. Tame inflation and economic reports, strong corporate earnings, and lack of progress on a peace plan in the Middle East were the top storylines.

The CPI and PPI for July both eased modestly, mainly due to lower energy costs. The highlight was core inflation slowing to a 2.5% year-over-year increase, easing pressure on the Fed to raise rates at the upcoming September meeting. Other data showed signs of a cooling economy with declines in consumer sentiment and retail sales.

A handful of earnings releases came as the reporting season wound down, with composite S&P 500 growth at an incredible 50.4%. As we mentioned before, that growth got a bump from investment gains that Alphabet and Amazon recorded, but it was still a spectacular 32.0% excluding those gains.

The Trump administration shifted its talking points to implementing severe economic sanctions on Iran rather than relying on a military solution. On Friday, the United Arab Emirates blamed Iran for firing drones at two tankers operated by a state-owned oil company as they sailed through the Strait of Hormuz. No progress is in sight.

The Chicago Sports Scene, on the other hand, is seeing great progress. The Bears scored 34 straight points in their preseason opener versus the Browns at Soldier Field. Just say “No” to Hammond, Bears fans. Meanwhile, the White Sox extended their lead in the AL Central, and the Cubs are hot on the tail of the Brewers in the NL Central.

This Week

Earnings reports from Walmart, Target, and Home Depot will provide investors with a read on the health of the U.S. consumer and housing market.

The economic calendar is quiet, with Friday’s global PMI reports providing a fresh look at economic activity. At the same time, regional U.S. manufacturing data include Monday’s Empire State index and Thursday’s Philly Fed manufacturing report.

The Federal Reserve will release minutes from its July meeting Wednesday. The market sold off sharply following that meeting, but has since recovered.

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