By Bill Hornbarger, Chief Investment Officer
Print This Post
Three Things to Watch
- The U.S. Federal Reserve (Fed) is widely expected to lower interest rates this week for the first time since President Trump took office for his second term. The July revisions and subsequent soft employment numbers have tipped the scales in traders’ minds that the time is now. Futures indicate that a 25-basis-point cut is the most likely outcome, with two more quarter-point cuts priced in by the end of the year. The Fed will cut rates despite the core Consumer Price Index remaining stubbornly above target, with year-over-year changes of 3.1% in both of the last two months.
- This will be a big week for central banks. Half of the world’s 10 most traded currencies, which represent 40% of the global economy, are subject to either rate changes or policy affirmations. Central bankers from Japan, the United Kingdom and Canada all meet this week.
- On the data front, retail sales and the leading index will garner the most attention. The leading indicators are expected down for the 39th time in the past 42 months, while retail sales are expected to rise 0.3% after larger gains in the previous two months and questions around how long shoppers will keep spending with inflation higher and job creation lower.
Three Things to Know
- It’s a rare financial phenomenon when both the S&P 500 and gold hit record highs simultaneously. These two assets typically move in opposite directions. The S&P 500 tends to surge when investors are confident, embracing risk and expecting economic growth, while gold usually spikes when uncertainty looms—acting as a safe haven during inflation fears, geopolitical tension or financial instability. Both stand at/near record highs, sending a mixed signal of optimism and anxiety. (Source: BFE, Copilot)
- Newly released data shows that U.S. household net worth jumped by +$7.1 trillion in the second quarter of 2025. (Source: The Kobiessi Letter)
- The Dow crossed above 46,000 last week for the first time, joining the S&P 500 and the Nasdaq Composite at record highs. This is the 13th straight year in which the Dow has hit at least one all-time high, a streak that has never happened before. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.