We closed a volatile near all-time highs.
Last week witnessed the CPI coming in near expectations at 2.7%.
The problem came with the PPI coming in higher than expected.
The problem with the higher Producer Price Index is that it could be sign that inflation is in the pipeline and will soon hit consumers.
There was also the worry that the early-week optimism for coming rate cut in September was crushed later in the week.
It cannot be understated how well the earnings reports came out for the latest quarter.
While that is great, the market trades on what is coming six to nine months from now.
This is where projections on the impact of tariffs, inflation and interest rate levels are all over the spectrum of possibilities. The real linchpin will be how much can consumers withstand before cutting back.
There will be attention focused this week on the economic summit in Jackson Hole this week.
In particular on Friday, Fed chairman Powel will speak.
The obsession over cutting interest rates will be where the rubber meets the road.
My concern is that we reported a yet higher deficit for government expenditures exceeding tax revenues.
The current administration has to have a strong economy to float the boat.
As if that wasn’t enough for you, there will be meetings in DC to try to develop a plan to end the war in Ukraine.
Israel appears to be taking over Gaza and tariff talks continue.
Did I mention school starts along with football on the near horizon.
Summer is rushing to a close.
I would only suggest that betting against this market has been a mistake.
The multiple level is outside my comfort level.
I am still invested and will stay the course.
I have plenty of cash should this whole thing go south.
That is saying a lot of nothing in reality.
Just not a comfort level for a value investor, but this market just won’t quit.
