Stock markets recovered from a dive in mid-July to close the month higher. Bond markets were also positive over the month. Most stock sectors rose over the month, including utilities, health care, and REITs. Stock indices average for July were 2.8%.
While food and oil prices climb to all-time highs, core inflation increases were largely caused by the chip shortage from the semi-conductor plant that burned in Japan. The bond market is shrugging off the current surge in inflation as the economy recovers from the effects of the pandemic. Money is moving again under the current stimulus (GDP up 7%) and the consumer price index (CPI) is climbing back to its pre-pandemic trend. The recent surge in wage growth is expected to level off. While runaway inflation is a current concern, the long-term concern is deflation. The FED is our watchdog, evaluating everything.
In many ways August is the best of summer with the return of cooler evenings and the bounty of fresh tomatoes, peaches, and corn. This summer has welcomed back outdoor venues and meetings in person. Mike and I have enjoyed Tanglewood concerts and gatherings with family and friends as never before. The simple joy of hugs. Never (a very long time) to be taken for granted again.