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 a touch higher of the print while yields were lower by ~3bps. The report was a bit cooler than expected adding to the bid in Treasuries and equity futures. The equity strength continued through the first hour of trade. The S&P 500 broke above 7,800 before starting to drift lower, giving up about half of the gains though we have firmed up again. Shortly before equities topped out oil prices began to reverse the overnight losses on reports that an Aramco refinery was targeted by drones. ICE Brent is down ~1.5% but is about $2 off the lows. Tech is outperforming with the NYSE 100 index up ~1%. Today has been the most exciting day this week (though the bar is low) as we are seeing the strongest gains, it is my daughter’s birthday and the two-month anniversary of the Knicks Championship