If you felt a small tinge of anxiety when you woke today, we get it. It’s August 1st, which unfortunately means we’re in the last 1/3 of summer. Given the oppressive heat waves spanning the globe, perhaps that’s not the worst thing. Equities equally hot last month, and so the trepidation could be due to concern this was nothing more than a bear market rally, with stocks surely headed for a measure of mean reversion. Regional Fed President Kashkari attempted to throw a bit of cold water on the hot streak but the day’s meandering had more to do with a directionless summer day than sentiment cooling off. It’s been quite the opposite of late, setting up an ugly scenario were inflation data were to fly in the face of the recent narrative. That being the Fed ready to make a clear pivot. The data we got this morning was net positive even if there were a series of hits and misses. Employment was stronger than expected as was manufacturing but new orders slipped. That said, attention was squarely on ISM prices paid, which took a significant dip lower and further solidified the hope the CPI/PCE figures to come in the next two weeks will stay on message.
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