U.S. Indexes Stocks closed modestly lower on Friday in quiet trade, with the NASDAQ 100 underperforming, while the RUSSELL 2000 bucked the trend to close higher and the equal-weight S&P 500 was flat. Sectors were mixed, with Energy outperforming alongside firmer crude prices, while Technology and Health Care lagged. US data was soft but had little lasting market impact. Retail Sales disappointed, while the University of Michigan Consumer Sentiment fell notably alongside declines in both Current Conditions and Expectations. However, 1-year inflation expectations ticked up to 4.3% from 4.2%, while the 5-year remained at 3.3%. Treasury yields rose in a bear steepening despite the softer data, with no obvious catalyst in quiet trade. Firmer oil and higher near-term UoM inflation expectations may have provided some pressure, while Fed pricing was little changed with a September hold still around 67%. Crude prices settled higher amid continued geopolitical uncertainty. Treasury Secretary Bessent said the US will implement unprecedented measures against Iran, while the UKMTO reported a tanker was struck by a drone while transiting outbound through the Strait of Hormuz. In FX, the Dollar underperformed while NZD led the gains. The Japanese Yen briefly strengthened on reports the Bank of Japan could hike as soon as September and accelerate subsequent tightening, before paring the move. Gold also advanced despite higher Treasury yields, supported by the weaker Dollar and continued geopolitical uncertainty. US Retail Sales fell 0.6% M/M in July (exp. +0.1%, prev. +0.2%), significantly below expectations, while sales excluding autos declined 0.3% (exp. +0.2%, prev. -0.2%). The details were also soft, with sales excluding autos and gasoline falling 0.2% M/M (prev. +0.4%), while the closely watched Control Group declined 0.4% (exp. +0.3%, prev. +0.4%), pointing to weakness in the component most closely linked to consumer spending in GDP. Looking at the sector breakdown, weakness was led by nonstore retailers (-2.2%), motor vehicle & parts dealers (-1.8%), gasoline stations (-0.9%), and electronics & appliance stores (-0.5%). Conversely, clothing & clothing accessories stores (+1.9%) saw the strongest increase, followed by health & personal care stores (+0.7%), miscellaneous retailers (+0.5%), and food services & drinking places (+0.5%). On an annual basis, retail sales growth slowed to 5.0% Y/Y from 6.7%. Overall, the report points to a notable loss of momentum in consumer spending at the start of Q3, particularly given the downside surprise in the Control Group. Some of the July weakness may reflect a reversal of World Cup-related spending and consumption brought forward into June, although the broad-based softness, including the decline in Control Group sales, suggests this was unlikely to be the sole driver. The University of Michigan’s preliminary Consumer Sentiment Index fell sharply to 51.0 in August (exp. 54.5, prev. 55.2), ending two consecutive months of improvement, with weakness seen in both Current Conditions at 51.8 (exp. 55.0, prev. 54.8) and Consumer Expectations at 50.6 (exp. 55.2, prev. 55.4). Surveys of Consumers Director Hsu said sentiment fell around 8% on the month, with expected business conditions particularly weak, declining 11% for the short-run and 17% for the long-run, while views of personal finances saw only modest deterioration. Hsu noted the decline was broad-based across demographic and political groups, with particularly large falls among older, lower-income and non-college-educated consumers, who are more vulnerable to an erosion in purchasing power from inflation. Notably, just 8% of consumers expect income growth to exceed inflation over the coming year. On inflation, one-year expectations edged up to 4.3% from 4.2%, remaining well above the 3.4% seen in February before the Iran conflict, while five-year expectations were unchanged at 3.3% for a third consecutive month. Overall, the survey points to a notable deterioration in consumer confidence and the growth outlook alongside still-elevated near-term inflation concerns, although longer-term inflation expectations remained stable. Fed Member Goolsbee said the US economy and labor market remain broadly stable and that he supported the decision to hold rates steady in July. He cautioned against reading too much into one month of weak Retail Sales, though continued spending weakness would become a concern. On inflation, Goolsbee said he has been encouraged by recent CPI reports but needs to see more data. He also highlighted two consecutive weak productivity readings, warning that a persistent deterioration in productivity would challenge the narrative that AI is delivering significant productivity gains. Elsewhere, Oil closed higher by 1.35% and Gold by 0.75%.
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For anyone following my Platinum Service it made 440 points on Friday and is now ahead by 1710 points for August after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.17% lower at a price of 7785.
The Dow Jones Industrial Average closed 107 points lower for a 0.20% loss at a price of 53,732.
The NASDAQ 100 closed 0.13% lower at a price of 30,946.
The Stoxx Europe 600 Index closed 0.21% lower.
Last Friday, the MSCI Asia Pacific closed 0.6% higher.
Last Friday, the Nikkei closed 0.59% higher at 68,713.
Currencies
The Bloomberg Dollar Spot Index closed 0.31% lower.
The Euro closed 0.35% higher at $1.1568.
The British Pound closed 0.36% higher at $1.3535.
The Japanese Yen rose 0.08% closing at $159.34.
Bonds
U.K.’s 10-Year Gilt closed 6 basis points higher at 5.05%.
Germany’s 10-Year Bund Yield closed 8 basis points higher at 3.21%
U.S.10 Year Treasury closed 4 basis points higher at 4.69%.
Commodities
West Texas Intermediate crude closed 1.35% higher at $82.35 a barrel.
Gold closed 0.73% higher at $4374.10 an ounce.
This morning on the Economic front we have a speech from ECB Member Lane at 10.30 am, followed by U.S. New York Empire State Manufacturing Index at 1.30 pm. Finally, we have the NAHB Housing Market Index at 3.00 pm.
Cash S&P 500
Last week’s CPI and PPI prints, both disinflationary, with the NFIB small-business survey showing pricing intentions collapsing back to pre-war February levels. On the other side of the ledger, Friday’s Retail Sales print added the demand-side confirmation: the consumer is losing steam. Bond markets are already pricing another Fed hold. Equities are still processing. Real interest rates have been rising, marking a clear break from the negative real-rate environment of the 2010s. This shift reflects record sovereign and corporate borrowing, the retreat of central banks and traditional duration buyers, and growing policy uncertainty surrounding the Fed, U.S. Treasury financing, and Japan. The global bond market is not running out of capital. But the capital available to absorb duration is becoming more conditional, policy-sensitive, and expensive. The shocking Retail Sales decline transcended the timing shift of Amazon Prime Day and the end of the World Cup. The U.S. economy has shown no momentum thus far in the third quarter. However, Bond Yields instead of falling are rising with the 10-year closing again at 4.70%. Despite all of the above my ‘Nothing Matters’ theme continues with U.S. Indexes closing at or near all-time highs. Trading volume on the S&P 500 E-minis has steadily declined since the end of July and did not even reach 850,000 contracts on Friday, the lightest trading day since the final few days of 2025. The most exciting thing this week is likely to be the Fed Minutes, and given how much Kevin Warsh likes to share, those Minutes are not likely to say much, either. Additionally, we are now well past peak Treasury issuance and have reached the point where issuance will begin to decline steadily into September, with a few weeks of paydowns before issuance ramps back up in October. The cumulative T-bill issuance charts had been working very well until two weeks ago, when the gamma squeeze hit the markets. There is still plenty of T-bill liquidity draining that could reassert itself with a 12-day lag. Meanwhile, the Dispersion Index continues to melt. No surprises here, right? I mean, I have been talking about the same thing for months, and it was well advertised that it would unwind after earnings season. The only remaining issue at this point is that implied correlations remain very low. At some point, correlations will be forced higher, and the only reason they have not moved higher to this point is that the VIX has been getting pounded every day ahead of OpEx. That could potentially change this week. The 30-year rate rose this past week, closing at 5.26%, but more importantly, it appears to be consolidating here, similar to what we saw in USD/JPY a few weeks back. That could mean a breakout to the upside may be in store for the 30-year in the not-too-distant future. What is interesting is that, as I have been researching real rates and inflation expectations, I found that the 5 year-5-year forward real rate is currently around 2.7%, has been rising, and moves nearly in step with the 30-year nominal rate. That tells us a couple of things, but, most importantly, in my view, it suggests that the market is in the process of repricing the economy’s neutral rate, which is causing nominal rates to rise. The 30-year inflation breakeven has been practically flat, stuck between 2.0% and 2.5% since 2021. More importantly, if the 30-year breaks out from here, it would suggest that the market’s assumption for the neutral rate is rising. My S&P plan worked well as after the market traded the whole of Thursday’s sell range for a 7798 average short position before selling off to my revised 7780 T/P level and I am now flat. Today, I will again be a seller on any further rally to 7818/7844 with a higher 7861 ‘Closing Stop’. If I am taken short, I will have a T/P level at 7794. When the S&P finally sells off, I will come back with a new buy range.
EUR/USD
I am still flat. The Euro never came close to Thursday’s buy range, rallying into Friday’s New York close following the release of the much weaker than expected Retail Sales and UoM Report. Today, I will raise my buy level to 1.1430/1.1500 with a higher 1.1375 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1570. I still do not want to be short the Euro at this time.
Dollar Index
No Change: I am still long from last week at an average price of 100.45 with the same 99.35 ‘Closing Stop’. As I go to post, the Dollar is trading lower at a price of 99.60. I will now lower my exit level on this position to a small loss at 100.10. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell closed at a new all-time high on Friday at a price of 3066. I am still short the Russell at an average price of 3020. I will leave my 3105 ‘Closing Stop’ unchanged while raising my T/P level to 3015 and reassess if executed. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE continues to trade heavy, never coming close to Thursday’s sell range and I am still flat. Summer trading conditions with volatility almost not existent. The FTSE has short-term support from 10640/10720 where I will be a small buyer with a ‘10555 Closing Stop’. If I am taken long, I will have a T/P level at 10795. I no longer want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market rallied to my 54020-sell level before trading lower to my revised 53760 T/P level and I am now flat. Today, I will again be a seller of the Dow on any further rally to 54100/54400 with a higher 54605 ‘Closing Stop’. If I am taken short, I will have a T/P level at 53830. I no longer want to be a buyer of the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NASDAQ continues to play catchup with both the S&P and Dow. Thursday’s move higher saw the market trade the whole of my sell range for a now 30000 average short position. I will leave my 30305 wider ‘Closing Stop’ unchanged while raising my T/P level to 29900. If any of the above levels are hit, I will be back with a new update for my Platinum Members
December BUND
The price action for the Bund is bearish as despite weaker than expected Inflation and Economic date Bund Yields continue to rally, closing at a price of 3.21. I am still flat. Today, I will now lower my buy level to 123.00/123.80 with a lower 122.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 124.50. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat. Today, I will continue to be a small buyer from 4170/4270 with a higher 4085 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4330.
Silver Rolling Contract
No Change: I will not chase Silver from and will stay flat today to see how the market reacts to last week’s huge run higher. If this view changes, I will be back with a new update for my Platinum Members.
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