It was a light week for economic data. That left lots of room for focus on the new Fed Chairman’s speech from Jackson Hole. The interest rate hike hawks quickly interpreted his remarks to signal he will raise rates in September, or at a minimum, he is not afraid of President Trump and will do the right thing when necessary. That led to a resumed rally in the Dollar with an uptick in the key 10 Year Treasury Bond yield. That also led to an interesting downtick in the 30 Year Treasury Bond yield. That action historically signals expectations for an economic slowdown. Accordingly, that led to a substantial sell off in US Small Cap Equities and a resumption in market leadership by big Tech and the AI trade. Globally, there were no meaningful, relative, or absolute.... (click for more)

The Fed watching game played out in a frenzy of parsing every word from the new Fed Chairman Warsh. A weak July Jobs Report and a slowdown in July Retail Sales beat back the drum beat for a September rate hike. Then the hawks jumped on Warsh’s speech from Jackson Hole and presto, through tortured reasoning, a rate hike in September was back on the table. With that, in the last week of the month, traders wiped out almost 60% of the gains in US Small Cap Equities for the month. The hard economic news showed a solid growth economy with growth accelerating in the manufacturing and services sectors and the consumer remaining resilient. Housing remains sluggish, constrained by a low supply of existing homes for sale and mortgage rates ..... (click for more)