To The Moon

For week ending Fri, 14 Aug 2026, US market performance could at best be described as “mixed”.

Overall, the week reflected a classic “good news is good news” dynamic: cooling inflation & steady earnings supported valuations.

Soft activity data capped upside and prompted a modest Friday pullback from record highs.

By the time market called it a week:

• DJIA: -0.36% (-340.25 to 53,732.41).

• S&P 500: +0.44% (+34.02 to 7,785.76). Crossed the 7,800 mark for the 1st time on Thu, 13 Aug 2026.

• Nasdaq: +0.18% (

  +48.72 to 26,729.16). Eked out its 3rd weekly gain in a row, ending the week higher marginally.

Weekly Catalysts.

Catalysts that have either lifted / dampened market sentiments include:

Cooling inflation.

• July 2026 - Consumer Price Index (CPI) and Producer Price Index (PPI) reports released during the week showed softer-than-expected price pressures.

• This initial disinflationary signal boosted rate-cut expectations from US Fed, supporting equity valuations through Thursday.

Weaker-than-expected economic data:

• July 2026 - retail sales and consumer sentiment came in surprisingly weak, resulting in a Friday rotation out of riskier names and contributing to the Dow’s underperformance and the slight daily declines across all three indexes.

Geopolitical Tensions & Oil Price Spikes

• The 5½ Middle East conflict continues to keep oil prices elevated.

• It has also hardened into a naval & diplomatic deadlock centered on the Strait of Hormuz

• The impasse has kept crude oil prices elevated, adding cost-push inflation fears to an otherwise slowing economic backdrop and capping weekly upside across major averages.

Without progress towards a final deal. immediate risks point to a prolonged “no war, no deal” stalemate, resulting in a ticking time bomb that could erupt anytime - kaboom !

US Economic Reports: last week.

• *Wed, 12 Aug 2026 - Consumer price index (CPI) for July 2026.

• *Thu, 13 Aug 2026 - Producer price index (PPI) for July 2026.

• Thu, 13 Aug 2026 - Jobless claims.

• *Fri, 14 Aug 2026 - US retails sales for July 2026.

• *Fri, 14 Aug 2026 - US consumer sentiments (prelim) for August 2026.

• (*) - reports that have may have exerted pseudo-pressure on US market.

Consumer Price Index (CPI).

Latest US Bureau of Labor Statistics (BLS)’s Consumer Price Index (CPI) report for July 2026 showed a continued, albeit gradual, moderation in inflationary pressures across US economy.

Headline inflation.

• Monthly reading rose to +0.1% MoM, in lined with consensus and rebounded from June 2026’s −0.4% print.

• Annual reading eased in at 3.4%, again in lined with consensus and down from June 2026’s 3.5%. (see above)

Core inflation.

• Monthly inflation rose to +0.2% MoM, in lined with market estimates and recovered from June 2026’s 0.0%.

• Annual reading was lower at 2.5%, matching market estimates and similarly down from June 2026’s 2.6%. Latest reading is the lowest core pace in 5 months. (see above)

July 2026’s CPI was a clean “as‑expected” report:

• Headline and core both cooled modestly on a YoY basis.

• MoM prints normalized after June’s unusual headline dip.

More importantly, the reports reinforce a narrative of gradual disinflation without fresh upside surprises.

With all key metrics tracking consensus and trending lower, latest inflation data likely reduces near‑term Fed hike odds and supports markets’ view that policy can remain steady while inflation continues to ease toward target.

Producer Price Index (PPI)

Latest US Bureau of Labor Statistics (BLS) Producer Price Index (PPI) report for July 2026, signaled a sharper-than-expected cooling in wholesale inflation.

This reinforces the disinflationary narrative set by the CPI report released a day prior.

Headline inflation.

• Monthly reading was flat at+0.1% MoM, vs market consensus of +0.2% vs June 2026’s −0.1% print.

• Annual reading eased in at 4.7%, vs market consensus of 4.9% vs June 2026’s 5.5%, marking the lowest annual pace since March 2026. (see above)

Core inflation.

• Monthly inflation cooled to +0.2% MoM, vs market consensus of 0.3% vs June 2026’s 0.4%.

• Annual reading was also lower at 4.2%, in lined with market consensus and down from June 2026’s 4.7%. (see above)

Interestingly, BLS’s broader analytical core measure (excluding food, energy & trade services) accelerated to +0.4% MoM (from +0.1%), driven by firmer services pricing.

This hints at stickier underlying pressure beneath the softer standard core print.

Overall, the July 2026 PPI release provided a clear "softer-than-expected" print, complementing the previous day’s CPI figures and confirming that wholesale cost pressures are diminishing.

** Note: the reacceleration in core services (ex‑trade) suggests that while goods & energy are pulling inflation down, service‑side pricing power remains a risk, keeping the Fed cautious even as near‑term hike odds recede.

Jobless Claims.

US Department of Labour’s weekly jobless reports showed a modest tick-up in first-time filings alongside a decline in ongoing claims.

This points to a low-layoff environment that remains historically tight despite broader macroeconomic moderation.

Weekly claims.

For week ending 08 Aug 2026, initial jobless claims increased by +9,000 to a seasonally adjusted 209,000, higher than consensus of 200,000 and previous week’s 200,000.

The 4‑week moving average of 199,000 remained unchanged from prior week’s revised average. This indicates that uptick is more noise than trend. (see below)

Continuing claims.

For week ending 01 Aug 2026, continuing claims fell by -22,000 to 1.777 million, lower than forecast of 1.8 million and previous week’s downwards revised 1.799 million.

The 4‑week moving average came in at 1.7855 million, down from previous week’s 1.79075 million, reinforcing the gradual downtrend in longer term claims.

The 2 jobless claims reports presents a US labour market that is normalizing rather than unraveling.

Weekly filings rose modestly and above consensus, yet the unchanged 4‑week average and declining continuing claims imply no meaningful deterioration in labour demand.

Taken together with soft CPI/PPI, it supports a narrative of a cooling but resilient US labour market.

US Retail Sales.

US July 2026 retail sales report confirms that robust spending tailwinds seen in Q2 2026, bolstered by large tax refund payouts have run their course.

Monthly total retail and food services sales fell −0.6% to $763.6 billion, reversing June 2026’s +0.2% gain and missing the consensus expectation of a +0.1% to +0.3% increase. (see above)

On a YoY basis, sales rose +5.0%, down sharply from June 2026’s upwards revised +6.75% and below the roughly +6.7% prior trajectory, though still above the long‑run average near 4.75%.

While the YoY headline (5.0%) expansion remains (a) above the long-run historical baseline (about 4.75%) and (b) beats full-year projections, a significant portion of this annual growth continues to reflect cumulative price inflation rather than pure volume increases.

Adjusted for real inflation, real spending volume expanded at a much flatter trajectory.

The sharp July 2026 retail sales contraction signals that post-tax-refund spending momentum should be over, as heightened price sensitivity led consumers to pull back on big-ticket goods and e-commerce.

However, the solid 5.0% annual expansion confirm a healthy economic soft landing, reassuring US Fed that inflation is cooling without severe demand destruction.

US Consumer Sentiments.

On Fri, 14 Aug 2026, University of Michigan released its preliminary Survey of Consumers report for August 2026.

The data showed a sharp downturn in household sentiment, snapping 2 consecutive months of modest gains.

Consumer Sentiment Index fell to 51.0 from July 2026’s 55.2 in July, a −4.2% MoM drop that also undershot consensus expectations of 54.7 by a wide margin. (see above)

The report highlighted (a) growing anxieties over cumulative inflation and (b) broader economic trajectory.

More important, report’s two sub‑indices deteriorated:

• The Current Economic Conditions index slipped to 51.8 from 54.8.

• The forward‑looking Consumer Expectations index fell more sharply to 50.6 from 55.4. This indicates US households are increasingly worried about the year ahead.

Inflation expectations have edged up as well:

• The 1‑year inflation expectations rose to 4.3% from July 2026’s 4.2% .

• The 5‑year expectations held steady at 3.3%, keeping longer‑run expectations anchored but near the upper end of the Fed’s comfort zone.

The August preliminary print is clearly a negative surprise.

The report has effectively snapped 2 months of improvement and pushing sentiment to one of the lowest levels on record, driven by (1) war‑related fears over energy/food prices and (2) deteriorating business & income outlooks.

The combination of weaker sentiment and slightly higher 1‑year inflation expectations reinforce the “softening demand, sticky inflation fears” narrative seen in July’s retail sales and CPI/PPI.

Consumers are feeling the pinch even as underlying price pressures gradually cool.

For the Fed and markets, this supports a cautious, data‑dependent stance: less urgency to tighten further, but also less confidence that inflation psychology is decisively tamed, especially if geopolitical risk keeps energy prices elevated.

For the Fed and markets, this points to a wait‑and‑see approach: there is less need to raise rates again soon, but also less certainty that inflation fears are fully under control, especially if Middle East tensions keep energy prices high.

For US Fed and US market, the report supports a cautious and data‑dependent approach.

There is (now) less urgency to raise interest rates further.

However, there is also equally less confidence that inflation expectations are firmly under control, especially since geopolitical risks keep energy prices elevated.

My viewpoints : (mine only)

Based on last week’s US economic data, US economy is showing signs of cooling and remains resilient.

Inflation seems to be easing gradually, based on softer CPI & PPI, while US labour market remain stable with modest uptick in weekly jobless claims.

The unexpected is US consumers’ spending pulled back in July retail sales, with household confidence falling sharply in August 2026, amid worries about the cost of living and geopolitical risks.

Overall, the picture is one of moderating growth & disinflation that reduces the need for further Fed tightening, while still leaving policymakers cautious about inflation expectations and external shocks.

The persistent question on (my) mind is - is it time to “buy the dip” at every available opportunity ? What do you think ?

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