T&Q Morning Briefing

Markets managed to hold their ground yesterday and close flat, despite an unexpectedly hot PPI print, the largest monthly jump since June 2022. Tech again carried the weight, with megacaps absorbing most of the buying while small caps showed more mixed action. Rate-cut expectations for September remain firm, though traders have dialed back the odds for deeper easing this year. 

The next phase will hinge on how the consumer holds up, today’s retail sales and next week’s Jackson Hole gathering should set the tone. Meanwhile, geopolitical intrigue could steal the spotlight with the Trump–Putin Alaska summit now just hours away.

One of the Street’s most respected investors broke from the usual caution, declaring the Magnificent Seven aren’t overvalued — and suggesting it’s the rest of the market that’s frothy.

Small caps have quietly gained ground this week, but Thursday’s hotter PPI print reminded traders that tariff-driven inflation risks are real.

Bridgewater’s exit from China, announced alongside Ray Dalio’s formal departure, underscored the growing unease over China’s economic trajectory.

While indices hover near record highs, sentiment surveys show retail investors far less bullish. The market feels steady, but beneath the surface, the confidence gap is wide.

All eyes are on Alaska, where Trump and Putin will meet with sharply different objectives.

Putin seeks U.S. concessions on Ukraine, while Trump’s team wants arms control progress and trade leverage.

In the background, supply-chain power is shifting. China’s grip on rare earths may be less absolute than feared, potentially easing pressure on tech and green-energy producers.

Still, tariffs are quietly pushing into inflation expectations — a reminder that distant geopolitical moves can land fast in domestic prices.

A new report on America’s economic dynamism shows slowing population growth, tight housing, and low mobility reshaping the policy landscape.

In law enforcement, the Attorney General tapped the DEA chief to lead D.C.’s police, signaling a tougher stance in the capital.

On monetary policy, one potential Fed chair pick is pushing for aggressive rate cuts to head off deeper economic strain. His case could strengthen if the labor market weakens and consumers pull back.

Retail Sales

Export Prices

Import Prices

NY Empire State Manufacturing Index

Industrial Production

Michigan Consumer Sentiment 

No notable reports

 Asia: Nikkei 1.30%, Shanghai 0.48%
Europe: FTSE 0.05%, DAX 0.75%

Thursday’s inflation shock barely rattled the market, but sentiment is cooler than the tape suggests.

With retail sales, Jackson Hole, and a high-stakes Alaska summit all hitting in the next ten days, the calm may not last.