Good morning. Yesterday the highly anticipated CPI report turned out to be a non-event, inline on both headline and core, which led to another uneventful trading day as we hit the middle of August. This week continues to be a consolidation of last week’s strong gains. The S&P rose 0.3% yesterday, the equal-weight slightly less and the Russell outperformed, doubling up the S&P. The AI data center ecosystem was a winner yesterday following results from CoreWeave and Nebius, along with Lumentum (optical networking) and SMCI. A notable exception were the hyperscalers, which were all down except ORCL. Real Estate and Tech led the sectors, while Discretionary, Materials and Comm Services lagged. Treasury yields were flat to slightly lower on the CPI print and expectations for the Fed to remain on hold in September rose modestly.

This morning the PPI took its turn as the latest read on inflation. Equity futures were flat ahead of the print and yields were ~3bp lower. The report was slightly less on the screws than the CPI, a bit cooler than expected. Futures moved modestly higher, at their highs. While AI infrastructure names were strong yesterday, Cisco, Cerebras (concerns of competing against the mega chip makers) and Coherent (giving back yesterday’s optical rally) are trading lower in the pre-market despite strong results on the surface. HPQ and DELL are higher on Lenovo’s earnings report overnight. Tapestry is down as well on earnings, which look inline-ish.

Brent crude is down 2% this morning, pulling back from recent highs. Metals are lower as well, with gold down modestly, consolidating its recent run-up. Bitcoin and ETH are up slightly and Ag is mixed.