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SPEAKER_00: Snoozer, my weekly market review, August 16, 2026.
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SPEAKER_00: Not a great weekend for U.S. diplomacy.
- 0:12
SPEAKER_00: Iran threw ice-cold water on any lingering hopes of an imminent resolution to
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SPEAKER_00: the war by issuing a list of demands,
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SPEAKER_00: most of which were complete non-starters in the eyes of the Trump administration,
- 0:23
SPEAKER_00: that the U.S. would need to agree to before the Strait of Hormuz can be reopened.
- 0:29
SPEAKER_00: Israel then piled on, formally rejecting Trump's proposed Gaza peace plan.
- 0:36
SPEAKER_00: The week began with a snoozer on Monday,
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SPEAKER_00: despite a spike in oil prices resulting from the weekend's setbacks to hopes
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SPEAKER_00: for any impending stability in the Middle East.
- 0:46
SPEAKER_00: The indexes mostly trudged along aimlessly all day,
- 0:49
SPEAKER_00: closing slightly lower,
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SPEAKER_00: with traders' focus increasingly turning
- 0:53
SPEAKER_00: to important inflation data coming out later in the week.
- 0:58
SPEAKER_00: Trump responded to Iran's weekend demands with a made-up list of his own,
- 1:03
SPEAKER_00: knowing full well that every condition would be unacceptable.
- 1:07
SPEAKER_00: This is all just ridiculous PR theater from both sides.
- 1:11
SPEAKER_00: The actual work is being done behind the scenes,
- 1:13
SPEAKER_00: and Pakistani officials hinted on Tuesday
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SPEAKER_00: that there may have been some incremental progress in talks.
- 1:22
SPEAKER_00: Stocks hugged the flatline most of the day and again closed a touch lower for the session.
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SPEAKER_00: But still well within striking distance of
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SPEAKER_00: the prior week's latest all-time record high for the S&P 500 Index.
- 1:35
SPEAKER_00: Corweave and Supermicro Computer surprised to the upside with their earnings reports
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SPEAKER_00: and the stock prices jumped.
- 1:43
SPEAKER_00: CPI numbers for July,
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SPEAKER_00: released pre-market on Wednesday,
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SPEAKER_00: showed annualized retail inflation ticking slightly higher to 3.4% in line
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SPEAKER_00: with expectations,
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SPEAKER_00: which was deemed to give the Fed a greater excuse to do nothing with
- 1:59
SPEAKER_00: the Fed funds rate and sent the market probabilities
- 2:03
SPEAKER_00: of no change next month spinning higher.
- 2:07
SPEAKER_00: Stocks and bonds exhaled and broadly welcomed the benign reports.
- 2:12
SPEAKER_00: But the previous evening's solid earnings were the main drivers of a nice jump
- 2:16
SPEAKER_00: in big tech and AI names that helped take the S&P 500 back to the brink
- 2:20
SPEAKER_00: of new record high territory.
- 2:24
SPEAKER_00: Following another wild session in South Korea,
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SPEAKER_00: which is becoming a roller coaster of an AI driven market right now,
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SPEAKER_00: CPI's baby brother, USPPI,
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SPEAKER_00: which can often be a predictor of forthcoming CPI,
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SPEAKER_00: came out on Thursday morning and showed wholesale inflation running
- 2:44
SPEAKER_00: at 4.7% annualized.
- 2:47
SPEAKER_00: This was a meaningful cooling off from the previous month's huge spike,
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SPEAKER_00: but right in line with expectations.
- 2:54
SPEAKER_00: The indexes moved meaningfully higher as the bulls were emboldened by
- 2:58
SPEAKER_00: the week's relatively tame inflation data,
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SPEAKER_00: and the S&P 500 reached another new all-time record high,
- 3:06
SPEAKER_00: once again bolstered by another really good day for big tech and AI names.
- 3:12
SPEAKER_00: Short-term interest rates eased as the perceived need for a Fed rate hike
- 3:16
SPEAKER_00: in September diminished further.
- 3:19
SPEAKER_00: A relatively tranquil week in terms of price volatility Ended on
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SPEAKER_00: a somewhat downbeat note on Friday after data showed
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SPEAKER_00: that retail sales last month fell by the most in over a year,
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SPEAKER_00: particularly online stores and auto dealerships,
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SPEAKER_00: as Americans remain miserable and highly pessimistic in the face of the ongoing war
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SPEAKER_00: and its effect on gas prices,
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SPEAKER_00: the economy in general,
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SPEAKER_00: and the outlook for inflation in particular with tariffs top of mind,
- 3:49
SPEAKER_00: according to the latest consumer sentiment numbers.
- 3:53
SPEAKER_00: Stocks fell back a touch from their all-time highs,
- 3:56
SPEAKER_00: but still managed to finish the week in the green for the third straight week.
- 4:03
SPEAKER_00: Some other things I'm thinking about.
- 4:05
SPEAKER_00: If you are searching for reasons why long-term interest rates remain
- 4:09
SPEAKER_00: so stubbornly high,
- 4:11
SPEAKER_00: last week's US Treasury 30-year bond auction saw the highest interest paid in over
- 4:15
SPEAKER_00: a quarter of a century.
- 4:17
SPEAKER_00: Look no further than the fact that the U.S.
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SPEAKER_00: interest cost alone of servicing the latest national debt
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SPEAKER_00: of $40 trillion now exceeds the annual defense budget.
- 4:32
SPEAKER_00: Trump and his fawning minion Energy Secretary Chris Wright asked us all
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SPEAKER_00: to not believe our own eyes last week.
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SPEAKER_00: When claiming without any evidence that the wealth of private satellite data
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SPEAKER_00: that is conclusively showing traffic through the Strait of Hormuz slowing to
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SPEAKER_00: a trickle was somehow totally wrong and made the ludicrous claim
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SPEAKER_00: that oil was flowing out of the region at a rate of 15 to 20 million barrels a day.
- 4:59
SPEAKER_00: Trump also threatened to claim the Strait as a territory of the United States.
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SPEAKER_00: Energy traders just rolled their eyes and went back to pricing the commodity based
- 5:11
SPEAKER_00: on actual facts and reliable data,
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SPEAKER_00: shrugging off what was clearly just a pathetic attempt to try
- 5:18
SPEAKER_00: and allay voter concerns about prices at the pump ahead of the midterms,
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SPEAKER_00: since Americans have never in history paid this much for a gallon of gas in
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SPEAKER_00: the peak driving month of August.
- 5:30
SPEAKER_00: Oil prices rose by more than 5% last week.