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Market Brief – Friday 7/29/22

Stocks rose in overnight trading as investors cheered tech earnings and the hopeful end of a very short recession. Treasury yields rose in overnight trading as investors believe higher interest rates are here to stay.

The Personal Consumption Expenditures Price Index, the Fed’s preferred gauge of inflation, rose +1.0% in June and +6.8% from this time last year. Excluding food and energy, Core PCE rose +0.6% in June and +4.8% from this time last year.

Personal incomes rose +0.6% and personal spending rose +1.1% in June as Americans continue to spend more than they make. Inflation-adjusted personal consumption rose +0.1% in June.

The University of Michigan’s Consumer Confidence Survey for July showed a slight increase in consumer sentiment and an increase in current conditions. Expectations were unchanged. Inflation expectations fell along with 5-year inflation expectations.

Stocks rallied most of the day to close sharply higher as investors celebrate the end of the recession. Treasury yields rose to close higher on the day.