Daily Market Color August 30, 2019Consumer Spending Hot, Inflation Growth…Not The US economy continues to be supported by robust consumer spending. Despite the recent flurry of weak manufacturing data that has accompanied the ongoing tariff wars, the American consumer base proved its resilience in the underlying spending figures for July which were released this morning. Household spending rose a seasonally adjusted 0.6% last month, outpacing median forecasts of +0.5%, albeit income growth missed expectations with a tempered 0.1% monthly rise. Also detailed in the report, the core personal consumption expenditures (PCE) price index, which is the Fed’s preferred measure of inflation, rose 1.6% YoY in July. The tepid inflation reading all but confirms a cut by the Fed in two weeks, which financial markets continue to price the likelihood of at 100%. It’s been an eventful summer vacation for financial markets. With Labor Day on the horizon, let’s take a look at what we’ve observed since Memorial Day… 10yr Treasury yields/swap rates declined 75-80 basis points to new all-time lows 2-year Note yields not as much…INVERSION! The DJIA rose 3.85%, but was 7.6% higher than the Memorial Day level in mid-July WTI crude seesawed within 10-15% range Well, so much for relaxation during the summer… Have a great Labor Day weekend! As a reminder, Derivative Path will be closed, along with the US financial markets, in observance of Labor Day on Monday, September 2nd.