We will get a couple of measures of inflation this week with PPI Tuesday and CPI on Wednesday.
Expectations are for the inflation rate to remain above a level that the Fed is comfortable with at this time, postponing any rage reduction.
Fears of a recession have waned after a poor jobs report two weeks ago.
The calls for up to 6¼ point reductions have met skepticism.
We will also hear from Home Depot and Walmart on how consumers are spending this quarter.
There is some thought that consumers may have pulled back on spending.
That comes with the school year starting.
This also comes with an escalation of conflicts in Israel and Ukraine.
The only thing we have less of is the Olympics, which some contended was a drain on productivity over the last two weeks.
I cannot forget to mention that we have the election heating up with no incumbent running for reelection.
We have the DNC national convention on the near horizon and the election just 100 days from now in early November.
There will not be a lack of things for investors to consider.
It has gone with little reporting, but Covid cases have been on the rise.
It is remarkable how little attention the disease has received.
It has become just another virus like the flu.
We had an athlete run in a race during the Olympics after being diagnosed with Covid.
In the commodities sector, gold and silver held recent gains.
Crude and natural gas recovered some of the lost ground.
Bitcoin has taken on quite the volatility going from $50,000 to nearly $70,000.
The crypto is not the same as gold and is rather a collectable of a limited addition items much like art.
In other areas, copper continues to hold its recent gains.
The recent earnings reports included a positive report from Caterpillar.
The equipment maker is a real measure of the economy outside of technology.
With all this to distract investors, the market took it on the chin or the fourth week in a row.
It did recover from significant losses earlier in the week.
There was less talk of a recession and the term correction was used more of the time.
It seems to me that profit taking was at hand.
Warren Buffet was the leader of the pack raising cash out of stocks he had substantial positions in like Bank of America and Apple.
I feel investors realize the real monetization of AI may take some time.
We went through this with the internet.
It took years for some of these companies to make a profit.
Amazon didn’t make a real profit for almost a decade as it took all its cash flow and put it into capital expenditures expanding its structure.
There grand transformations take time.
We shall see what the economic reports indicate this week.
It doesn’t seem to me that we have a ways to go to curb inflation and the economy is far from broken.
That in no way says that it’s fun filling up your car, paying bills and buying groceries.
It is not like prices haven’t been going up for years. The problem lies in whether incomes are adjusting quickly to adapt.
That is where the real problem lies and I doubt the federal government can do anything about it.
