The much-awaited CPI inflation report came out last Wednesday, and while CPI is still at a YOY level of 8.5%, it was zero for the month of July, giving investors hope that inflation has peaked.

U.S. equities were mostly higher last week, despite 4 out of the 5 S&P 500 sessions being negative. Growth stocks outperformed value names. Treasuries were weaker with the yield curve flattening in a crazy week that saw the 10-year drop as low at 2.5% before ending the week at 2.8%.

Markets posted solid gains last week as the Fed raised interest rates by another 75 basis (0.75%) points as expected. Second quarter GDP was negative for the second consecutive quarter, coming in at -0.9%. In a "bad news is good news" scenario, investors are betting the Fed will need to be less aggressive going forward with rate hikes to fight inflation.

Signs of a cooling economy and fading inflationary pressures boosted investor sentiment last week. Risk-on assets like small cap and tech outperformed, and consumer discretionary stocks rallied as well.

The U.S stock market ended the quarter officially in bear market territory, down more than 20% for the year. While there have been multiple factors causing the market to experience its worst first half of the year, since 1970, the cause can really be synthesized into one word: inflation.

Hope everyone had a great 4th of July, post-quarter-end weekend! While the quarter and year have been somewhat ugly from a market performance standpoint, we in America still have much to be grateful for! Happy 245th birthday USA!

The market is in a new phase where bad news is good news. Signs that inflation is moderating as growth cools, helped stocks to rally this last Juneteenth holiday-shortened week, lifting the S&P 500 out of bear market territory. Nearly every sector rebounded with the exception of Energy, as oil prices continue their retreat off record highs.

After a relief rally on the Fed's three-quarter percent (75 bps) interest rate increase, its most aggressive hike since 1994, stocks sold off on renewed recession fears. The S&P 500 Index suffered its worst weekly decline since March of 2020 and entered bear market territory, down 24% below its January peak.

The market was hoping for some sign that inflation was abating, but instead, the May CPI number of 8.6% came in hotter than expected, even higher than April's 8.3% reading. Core CPI, ex-food, and energy climbed 6% which was also higher than estimated. Going into the week, the Fed was expected to raise interest rates by half a point (50 bps), but after Friday's hot number, some are now pricing in a three-quarter point (75 bps) hike.