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 Memorandum of Understanding (MOU) was apparently not well understood. Iran went back to harassing shipping in the Strait of Hormuz, the US resumed military strikes in Iran and oil prices predictably spiked. That led Treasury Bond yields to rise which hammered US Interest sensitive Bonds and popped the bubble on the AI trade. Yet the economic news remained quite bullish with manufacturing holding its solid growth rebound, the services sector moved to higher levels of solid growth and employers holding on tightly to current employees. Therefore, it is not surprising that the main business and consumer sentiment indexes have remained moderately positive, despite the headlines. While housing is still sluggish,...... (click for more)