Good Tuesday AM,

The Powell whammy continues to weigh heavily on the market. Predicting when the market will shake off his incredibly hawkish comments is impossible. We will need to see some amazingly bad economic news AND some very strong signs that inflation has moderated. Later the week, we will get the PCE numbers; if those come in low, we MIGHT see a bounce. Short of some unknown event, I expect continued weak to sideways movement between now and then.

Inflation is high and that is our biggest problem right now (although I am confident that by itself, it will moderate), but U.S. consumers’ relative purchasing power has never been higher.

As a result of inflation, the US dollar has strengthened. According to the WSJ, an index that considers inflation when measuring the dollar’s strength relative to currencies of major U.S. trading partners in July topped its previous peak from 2002, showing how the dollar’s surge has helped mitigate rising domestic prices. The Real Effective Exchange Rate for the dollar, calculated by the Bank for International Settlements, measures the currency against a group of key U.S. trade partners, taking into account the changing prices of goods and services in each relevant economy, Julia-Ambra Verlaine reports.

• Consumers Feel Worse Now Than They Did During Covid Lockdowns

• Inflation’s Silver Lining: You Can Make Money on Your Savings Again

And a report from Redfin shared what we all know…

The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, fell to 99.8% from 101.4% a year earlier. In other words, the average home sold at its asking price. This was the first time since March 2021 the ratio has fallen below 100%, meaning the typical home is now selling for below asking price.

Please remain safe and healthy, make today great!