Economic data releases really reaffirmed the strength in the US economy.  Manufacturing and services sectors moved to new highs. They also reported sharp increases in employment, at a pace not seen for over four years. Weekly Jobless Claims showed employers not willing to let go of employees. Overseas, business activity surveys reported steady growth in Germany, UK, Japan and India. Yet, US headlines continued to focus on the inflationary pressures from the rise in energy prices, which focus is no doubt exasperated by the upcoming midterm elections. The S&P 500 ended a volatile week up at 1.21% with Foreign Developed at 0.20% and Emerging Markets at 1.29%. In the US, Small Caps were negative. A rally in the AI trade technology stocks drove the positive... (click for more)

The real economy is defying consumer sentiment. The manufacturing sector’s growth is accelerating at a strong level. The services sector’s growth is also accelerating at a strong level. The August Jobs Report showed 162,000 new jobs; when adjusted for upward revisions to the prior two months’ reported jobs, the number is a very strong 217,000 new jobs. In watching “what they do, not what they say”, August Core Retail Sales came in at a very strong 5.6% versus 4.7% the prior month, year over year. However, inflation is driving the headlines and market sentiment. While energy costs are the obvious culprit, August Core CPI and Core PCE Price Index declined to 2.4% and 2.7% (adjusted for prior month’s revision), respectively, suggesting underlying inflation is moving...... (click for more)