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Navigating the Markets: August 14-18

Happy Sunday, friends! I hope you had a great weekend. The week ahead isn't as busy as the last several weeks we've had, but there's still a lot to pay attention to, so let's dive in.


The Big Picture


Last week's CPI data showed some acceleration in July from June, particularly in transportation and warehousing, then following closely behind it, shelter.

Source: Ayesha

Food inflation was also stubbornly high. Energy fell, though, which we may not see in August's data to come out in September.


Tech remains expensive, trading close to its 2021 peak after recently seeing some selling pressure. While NASDAQ company earnings performed better this quarter than S&P 500, tech companies are quite expensive overall.

Moving over to Horse's favorite index, 40% of Russell 2000 companies have negative earnings, which marks the highest level that we've seen since 2022.

The US government's interest payments are nearing an annualized rate of $1T per year, which will be the highest percentage of government tax receipts paid towards interest in over two decades.

Will inflation follow a path similar to the late 60s through early 80s, where it fades and then returns reinvigorated? A lot rests on the Fed and government policy (or the lack thereof), but so far there are some clues that inflation may become more structural in nature over the next 5-10+ years.

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