Market says… The Monday blues were so real this week – worries over Evergrade (more on this below) basically tipped over the first domino after which worries about a slowing economy from rising COVID cases and supply chains bottlenecks continuing to dampen productivity added to the chaos. And then China declared all cryptocurrency activity illegal, which hurt market sentiment pretty much overnight and pulled down fintech stocks with exposure to cryptocurrencies. The S&P 500 finally had its 5%+ correction moment this week but stocks managed to make up losses to end the week basically flat. Moral of the story: Volatility in the market is to be expected for a while…

Unexpected The August retail sales report was a pleasant surprise after consumer sentiment readings in August seemed to have hit rock-bottom given the new wave of COVID cases. Retail sales increased 0.7% in August (up 15.1% from August last year), while expectations were for a 0.8% decline. If you exclude autos (car sales have been under pressure not from a lack of demand, but just a total lack of supply), retail sales actually increased 1.8% from the prior month.  Moral of the story: Sales were strong across most categories the impact of the delta variant did come through across bars and restaurants, where sales were flat compared to the prior…

Rising costs  Economic data was about as slow to return after a long weekend as most of us. It was a short week with few updates but the market managed to slide into September with five straight down days ending Friday, so that’s been fun I guess. The biggest report of the week was the August Producer Price Index (PPI), which increased 8.3% compared to august last year, and marks the highest increase of the measure since it began in 2010. Excluding food and energy, core PPI still increased 6.3%, which is the highest annual increase since August 2014.  Moral of the story: PPI tends to be a leading indicator of what…

Shaky confidence  For being historically one of the slowest weeks in the market (week before LDW), there was actually a slew of important economic reports released this past week. We started with the US consumer confidence index, which fell to a six-month low in August driven by concerns about the delta variant and worries about higher food and gas prices. In addition to this low August print, the July number was revised down slightly.  Moral of the story: Even though concerns have caused confidence to pull back a little, consumers are still looking forward to spending money – travel, eating out, back-to-school, PSLs (though too soon for that imho) etc.…