Equity Markets Rebounded With Best Week of the Year

Wall Street rebounded after a rough start to the month, to close out its best week of the year. Investors saw a lot of economic data that did little to change the expectations of an interest rate reduction in September. Last week’s gains ended four straight weeks of losses, fueled by concerns that the Federal Reserve hadn’t lowered interest rates soon enough to prevent a major economic slowdown. However, favorable inflation data, robust retail sales and fewer unemployment claims reassured investors’ confidence, leading to a market rally. Each of the major benchmark indexes closed the week higher. All 11 of the S&P 500 market sectors gained ground, with information technology climbing more than 8.0%. Ten-year Treasury yields dipped lower as bond values advanced. Crude oil prices inched lower. The dollar declined, while gold prices increased.

Consumer Price Index Increased in Line With Expectations in July

The Consumer Price Index rose 0.2% in July, in line with expectations. The CPI rose 2.9% for the year ended in July, down 0.1 percentage point from the 12 months ended in June. Nearly 90.0% of the July increase was attributable to a 0.4% advance in shelter prices. Energy prices were unchanged, while food prices increased 0.2%. Prices less food and energy also increased 0.2% in July and 3.2% over the last 12 months.

Eye on the Week Ahead

The real estate sector dominates the economic data released this week. Sales of both existing and new homes will look to rebound from a period of declining sales.