The second half of last week saw the S&P begin to consolidate the sharp moves from earlier in the week. In retrospect it was a sign, because the Dog Days of Summer fell upon Wall Street this week, and the consolidation trend continued. Sectors were basically split between gainers and losers at mid-week and most were +/- 1%.

The CPI inflation report was the big piece of economic data this week, eclipsed only by Week 1 of pre-season football as the most anticipated event. And befitting the action, it was uneventful. Headline and core inflation were right in line with consensus. The PPI followed on Thursday, and was slightly cooler than expected, with no big surprises here either. It felt like the CPI non-event turned the cool-ish PPI data into more of a catalyst than it would have been otherwise. Two tame inflation prints back-to-back pushed yields lower and the S&P to its best day of the week, along with breaking above 7800 for the first time and setting a new record high. Thursday’s gain kept the S&P in the Green for the week. On Friday we pulled back from those records modestly. Energy was the clear leader. Utilities followed. Financials, Healthcare and Staples were up as well. Discretionary led to the downside. Comm Services and Materials were also weaker.

The FOMC meeting minutes and Flash PMIs will be the key events on the economic calendar next week. Import/Export prices, Housing Starts and Home Sales and Industrial Production will also be released as well as several regional Fed surveys. Earnings flow is ratcheting down but we’ll still get some important housing and consumer updates. Enjoy your weekend!