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Last Week's Recap and the Week Ahead (Inflation Data) Thumbnail

Last Week's Recap and the Week Ahead (Inflation Data)

"If you wait at a bus stop long enough, you're guaranteed to catch a bus, but if you run from bus stop to bus stop, you may never catch a bus."   Howard Marks   

Last week's market recap:

    • The S&P 500 was up .39% for the week.  Year-to-date the index is down -12.24%.
    • Large-Cap Value leads performance YTD at -7.31%
    • NASDAQ closed the week up 2.18% and is down -18.72% YTD.
    • 10-Year Treasury Rate increased, ending the week at 2.83% from 2.65% the prior week.
    • The 1-Year Treasury is yielding 3.27%
      • Fed Funds Target rate is 2.50%

The week ahead, 8/8: 

  • July CPI (Consumer Price Index) INFLATION
  • July PPI (Producer Price Index)

Quick Comments:

Financial markets sit in a peculiar time with investors more likely to cheer on bad economic reports in hopes it’s a sign of peak inflation.  For example: Last Friday’s job report was strong, meaning people are employed, which is good.  Except the market took it as bad, because more people earning money is inflationary, which means the Fed may have to raise rates higher for longer (be more hawkish).  It sounds somewhat like… The Princess Bride: Battles of Wits 

Well this week should be less peculiar and more straight forward.  Wednesday’s July U.S. inflation print, the Consumer Price Index (CPI) will likely test the recent rally in stocks that has lifted the S&P 500 to multi-week highs.

The benchmark index is up over 14% from its mid-June low, mainly due to expectations that the Fed will be less hawkish than previously anticipated.  A higher than expected CPI number could change this narrative.  A lower than expected CPI number could support a less hawkish Fed, and continue this summer rally.  The Headline CPI consensus estimate for Wednesday is 8.9%, down from 9.1% in June.  Will the Fed be satisfied with this week's CPI print?  Will the data cause the Fed to ease or accelerate rate hikes? 

Below is a chart of the individual components of CPI:

Additional Comments:

  • 2023 Social Security payments are estimated to increase roughly 10%.
  • I bonds are currently paying 9.62%.
  • Many Californians will start to receive Inflation Relief checks in October.  How does that help inflation? 

To discuss in more detail, feel free to reach out to us.


CRA Investment Committee 

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA 

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP® 

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP® 



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