S&P 500: 0.71% DOW: 0.87% NASDAQ: -0.09% 10-YR: 1.29%
Last Week on WallStreet - August 13
What Happened?
With most of the earnings season behind us, markets continued to trade at or near all-time highs. Stocks have ground higher in thin summer trading, bolstered by a rapid pace of earnings growth even as the spread of the Delta variant threatens to sap some speed from the economic recovery. Materials (+2.7%) and Staples (+2.2%) were on top for the week while Energy (-0.3%) was the only sector in the red.
- Inflation is still elevated
- Consumer sentiment tumbled in August
- It is still a job seeker's market
- Biden tries to pressure OPEC in a way to address rising energy prices
- Interesting articles from the Waterloo Watercooler
Thomas Franck - CNBC
July Consumer Prices Jump 5.4%, but Core Inflation Rises Less Than Expected
Prices paid by Americans for everyday goods and services rose 5.4% in July from a year earlier. Month-over-month the CPI index increased 0.5%. Both numbers matched expectations. Core inflation, which excludes the volatile food and energy portions, rose by 0.3% from last month and 4.3% from July 2020. Used car and truck prices, which rose rapidly between April and June, gained just 0.2% in July after a climb of more than 10% in the prior month. The path of inflation has policy implications for not only the Fed in terms of the timeline on monetary policy but also President Joe Biden. Persistent inflation could make it harder for Biden to win support for another $3.5 trillion spending bill after the previous fiscal relief.
The key takeaway is the major reopening components in the CPI are starting to show moderation as they posted the weakest contribution to the index since March. Still, cost pressures for businesses are mounting given supply constraints and surging demand. The Fed will continue to keep a close eye on the acceleration of inflation seen over the last few months, which they have acknowledged would be temporary.
Jesse Pound - CNBC
Consumer Sentiment Measure Sees One of Largest Drops on Record
The consumer sentiment index tumbled to 70.2 in its preliminary August reading. That is down more than 13% from July’s result of 81.2 and below the April 2020 mark of 71.8 that was lowest of the pandemic era. The August reading was also the lowest for the measure since 2011.
The key takeaway is consumer sentiment has been sensitive to the course of the virus and the delta variant could be causing only a short-term decline. Still, a sudden drop of this magnitude in the index is rare, and investors will be watching future economic data and earnings releases closely to get keys to what consumers are actually doing and not saying.
Jeff Cox - CNBC
It's Still a Job Seeker's Market: Job Openings Hit Fresh High in June
The number of job openings rose to a record 10.1 million in june from 9.5 million the previous month, marking the fourth straight all-time monthly high. Job hires rose by 697,000 to 6.7 million, separations rose by 254,000 to 5.6 million, and the quits rate increased to 2.7% in June from 2.5% in the prior month. The biggest notable in the report was that hiring increased more than job openings for the first time in 6 months which could reflect hiring headwinds abating.
The key takeaway is that this data is released on a one-month lag, and last week we saw a very strong jobs report, underscoring a recovering labor market. Labor supply should increase in the next few months as unemployment benefits expire and schools begin to reopen. Still, the rapidly spreading delta variant could stall some of this process if Americans delay their return to work.
Zeke Miller - AP
Biden Team is Seeking Ways to Address Rising Energy Prices
The Biden administration on Wednesday called on the Organization of the Petroleum Exporting Countries (OPEC) to move faster to restore the global supply of petroleum to pre-pandemic levels, and the White House asked the FTC to investigate the domestic gasoline market for any anti-competitive behavior that could be increasing prices. Gas prices are up about $1 from a year ago as Americans hit peak summer driving season and return to roads after pandemic shut-ins.
The key takeaway is rising prices, both at the pump and across other consumer goods, have become a potent talking point among Biden’s GOP critics. The White House has insisted that inflation will cool as the economy recovers from the twin shocks of the pandemic and the nation’s ongoing recovery from the virus-induced lockdowns.
From the Waterloo Watercooler
The MLB's Field of Dreams game could not have gone better for the league and its ratings as it had everything from Kevin Costner to a walk-off into corn. Watch the highlights here.
Just weeks before the US is scheduled to end its war in Afghanistan, the Biden administration is rushing 3,000 fresh troops to the Kabul airport to help with a partial evacuation of the US Embassy.
Jeopardy! will have two hosts for the first time in the storied game show’s history.
More than $300 million worth of cars for the super-rich have come up for auction at Pebble Beach this week. Here are the top 5 most expensive cars selling.
The highest temperature in European history appears to have been recorded in Sicily, with reports suggesting a high of 120F.
Want to find your inner Matt Damon and spend a year pretending you are isolated on Mars? NASA has a job for you.
Nearly all of the $600 million stolen in a huge crypto heist has been returned — but there’s a catch.
After trailing China for much of the Tokyo Games, the US pulled off a stunning comeback in the final hours of the 2021 Olympics on Sunday to edge China, 39-38, for the most gold medals.