Last week, America learned that a Fed staffer pointed out investors are receiving remarkably little extra compensation for owning stocks instead of bonds, and everyone immediately went back to talking about inflation. Very normal. Very fine.
- The S&P 500 fell 1.43% and the Nasdaq lost 2.05% for the week. The market keeps hearing "higher for longer" and has finally started asking follow-up questions. Utilities, industrials, and technology led the retreat, while health care and materials bucked the trend. Large caps beat small caps and value outperformed growth.
- The Bloomberg U.S. Aggregate Bond Index inched down 0.1%. Fixed income continues to answer the question, “What if we could get stock-market disappointment, without all that unnecessary optimism?”
- The 10-year Treasury yield rose to 4.73% and the 30-year Treasury yield climbed to 5.27%. If yields keep climbing like this, retirees may eventually stop pretending they own bonds strictly for diversification.
- Gold rose 5.5%. It’s the investment equivalent of a flashlight in the kitchen drawer: you hope you won't need it, but you’re glad it’s there.
- Crude oil rose 5.7% to about $87 per barrel. Oil prices have the same energy as those old Nigerian prince scam emails, except there’s no delete button. The ask just gets bigger every few months, and we’re already on the hook.
- The U.S. dollar weakened modestly against the euro, pound, and yen.
- The Fed’s July meeting minutes (published on August 19) revealed something its July 29 statement conveniently skipped: Fed staff told the Committee that the premium for owning stocks instead of bonds has shrunk to its thinnest margin since the dot-com bubble. This tidbit showed up in the minutes as a lone paragraph wedged between household debt vulnerabilities and a rundown of leverage at hedge funds and insurers, with no more visual weight than either.
- Housing starts dropped 12.4% in July to 1.239 million, well below expectations. America wants more homes, lower prices, and 3% mortgages—preferably in a walkable neighborhood with good schools. This order was placed sometime around 2020 and hasn't moved since; five years later, the tracking page still just says “received.“
- Pending home sales fell 2.3%, versus expectations for a 0.3% increase. Buyers saw the asking price, calculated the mortgage payment, and returned to Zillow to admire homes as a form of digital fantasy sports.
- Building permits rose 5.0% in July. Builders are still planning projects. Actually building them is apparently a separate emotional journey.
- Industrial production increased 0.2%, slightly below expectations. U.S. factories are still expanding, just with the enthusiasm of someone attending a mandatory team-building event.
- Import prices fell 0.4% and export prices declined 1.3%. Inflation cooled further, giving Fed economists the sort of emotional lift most people experience after finding an extra French fry at the bottom of the bag.
- Second-quarter earnings season’s doing that thing where 85% of companies beat expectations—which mostly means Wall Street analysts set the bar on the floor. S&P 500 profits are up 52% year over year, with tech and energy flexing, while health care hides in the bathroom after another rough quarter for biotech. Nvidia reports this week, and if AI bubble talk is loud now, wait till that number drops. Wall Street’s gonna need a group hug and a sedative.