Weekly Roundup: An Electric Week for the Market Was Also a Great One for the Portfolio
We added to one holding this week, and locked in outsized gains for two others.
I’m a Little ‘Fed’ Up …
I’d like to respectfully disagree with the Cleveland Fed president, make a few points about inflation, and take a look at Iran.
That’s a Wrap
Another day, another record? Sort of.
The S&P 500 managed to set a new all-time intraday record high as well as an all-time record closing high. Why? Inflation, or the lack thereof.
For the month of July, headline PPI printed at +0.0% month over month versus the +0.2% consensus and at +4.7% year over year versus expectations for a +4.9% print. At the core (ex. food and energy), PPI hit the tape at +0.2% month over month versus +0.3% consensus and at +4.2% year over year, even with consensus about down from +4.7% in June.
As it now becomes all but impossible for the Fed to raise short-term rates any time soon, at least not backed by logic, the yield paid by the U.S. two-year Treasury note contracted by 5 BPS to 4.15%, and the yield on the U.S. 10-year note dropped 4 BPS to 4.65%. This pushed equities higher.
The benchmark S&P 500 closed +0.6%, as the Nasdaq Composite gained +0.8%. Eight of the 11 S&P sector SPDR ETFs closed in the green, led by Communication Services ($XLC). Materials ($XLB) led the losers.
Workday ($WDAY) led the S&P 500 higher on takeover rumors. It was the memory trade that ruled the day, though, as SanDisk ($SNDK), Micron ($MU) and Western Digital ($WDC) all had nice days. Cisco Systems ($CSCO) took a beating after posting disappointing guidance along with what looked, otherwise, to be a pretty decent earnings report.
Have a great evening, gang. Dougie will be out again tomorrow and, God willing, I will be back to work through the day with you all. Now, go get some grub and maybe work out a little. Sarge out.
Positions: Long SNDK, MU equity.