The Strength of the Market is: Strong

Last week, inflation reports showed that consumer and producer costs are accelerating as oil prices remain elevated from the Middle East conflict. The main headline from last week was the summit between President Trump and Chinese President Xi Jinping - no major policy breakthroughs were announced and news from the summit was mostly considered underwhelming. The two did agree that the Strait of Hormuz must remain open. Last week, stocks were fairly flat. Recently, stocks have been on a record-breaking tear with renewed enthusiasm around technology stocks and artificial intelligence stocks. On Thursday, the Dow Jones reclaimed the 50,000 level and the S&P 500 closed above 7,500 for the first time, before ending slightly lower on Friday. Investors seem very optimistic, though, a slowdown in the recent stock market rally could be right around the corner.

Economic reports from last week came back mixed:

•Existing Home Sales - lower than expectation

•Small Business Optimism - lower than expectation

•Inflation (Consumer) - in-line with expectation

•Inflation (Producer) - higher than expectation

•Retail Sales - in-line with expectation

•Manufacturing (New York) - higher than expectation

•Jobless Claims - higher than expectation

This week, investors will look for guidance from economic reports like Housing, Manufacturing, Consumer Sentiment and Jobless Claims.