Last week, America continued its situationship with the economy: lots of mixed signals, no definitions, with no idea where this is headed.
- The S&P 500 basically shrugged and closed flat, while the Nasdaq inched up 0.4%, which is the market equivalent of taking one extra bite of a sandwich you didn't really want. Energy and tech led the week while consumer discretionary, materials, and real estate lagged. Small caps beat large caps, value kept absolutely dunking on growth, and international stocks beat developed markets.
- Crude oil climbed to roughly $91.50 per barrel, up almost 60% from year-end levels. Gold slipped during the week but remains historically elevated at roughly $4,477 an ounce as investors continue treating it as both an apocalypse hedge and a status symbol. Copper remains up about 15% YTD despite a modest weekly decline.
- The U.S. dollar was little changed from the prior week despite stronger-than-expected payroll growth, rising Treasury yields and continued speculation around the Fed's next move.
- The real plot twist came from the labor market, where August payrolls jumped by 162,000, way past expectations and a hard bounce back from July's sad little gain, while unemployment held at 4.1%, so all the eulogies for the job market were a little premature. It's not dead, it's just been ignoring your calls.
- Job openings held steady at 7.3 million in July while hiring and quitting both cooled, which means people are confident enough to keep their jobs but not enough to update their headshots; instead, everyone's staying put and quietly seething.
- The ISM Manufacturing PMI eased to 54.6 in August, missing expectations, but still marked an eighth straight month of expansion. Survey respondents were split about 42-58 positive to negative, and one of them said the quiet part out loud: business is fine, it's the economy that keeps showing up uninvited and messing with the vibe. New orders, production, and employment kept growing. Input costs stayed high and supply chains are dealing with tariffs, shipping snarls, and a war thrown in the mix—three separate headaches that manufacturers are just working around instead of waiting out.
- The trade deficit blew up 24.4% to $88.6 billion in July from $71.2 billion in June, as imports rose 2.8% and exports dropped 2.1%. A big chunk of that gap came from companies buying up capital equipment for AI and data centers because apparently we're all in an arms race to build the robot that's eventually going to write this newsletter for me. Great. Can't wait.
- Initial jobless claims for the week ended August 29 rose by 2,000 to 206,000, which in the grand scheme of things is basically a rounding error. Continuing claims rose by 8,000 to 1.779 million for the week ended August 22, meaning people who did lose their jobs are wandering the wilderness a little longer before someone hires them back. Layoffs themselves stayed relatively rare.
- 2Q26 earnings season is basically over, with 86% of S&P 500 companies beating earnings expectations, way past the usual 67.5% long-term average. Earnings for the quarter are now tracking at 53.3% growth year over year. At this point, corporate profits aren't reacting to the economy, they're just doing their own thing next to it.