Market Notebook

PRICE ACTION:
Equity prices, as measured by the ticker SPY, closed higher while bond prices, as measured by the ticker BND, closed lower over the last week.

SPY +0.40%
BND -0.06%

TECHNICAL ANALYSIS:
SPY price broke out of consolidation to the upside, suggesting a possible start of an upward trend.

BND price appears to be in a downward trend.

SENTIMENT:
Sentiment appeared driven by inflation expectations, with consumers feeling less confident as year-ahead inflation expectations ticked higher. Even as consumers felt less confident, market participants felt more confident that the Federal Reserve will hold interest rates steady at the next meeting.

ECONOMY AND FUNDAMENTALS:
Inflation data dominated the week’s data releases, with measures of inflation coming in muted for July. The measure of inflation that I regard highly is the trimmed mean PCE. This will be released on August 26th to include the July data. If the trimmed mean follows the broader measures of CPI, then it seems likely the probability of a Fed rate increase at the next meeting is reduced.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.