Summit Gambit

As much as the markets cheered the CPI numbers last week on Wednesday, the core inflation rate wasn’t great, and the PPI numbers on Thursday signalled trouble ahead. By Friday, optimism about the Putin-Trump summit kept equities near record highs, oil prices down, and the measure of perceived risk in the fixed income markets even lower.

According to the men themselves, there is no deal. Other than things having purportedly gone well, there was no announcement of even the most basic detail, component, factor, or aspect that could be considered to form the basis of an understanding that there is enough of a consensus to move forward on anything that could be deemed important.

That should come as no surprise. Strategy speaks loudest in silence, and leverage is lost the moment it’s revealed. What we do know is that whatever was discussed on Friday will probably impact the world in ways that we could not possibly hope to fathom for the next twenty years. So, where does that leave the markets on Monday?

Probably not too far from where we left off last week. After all, we didn’t get any bad news either, and we are still expecting multiple rate cuts by the end of the year. Earnings have also been good with more than 80% of S&P 500 companies beating expectations, and it’s not like we will be watching less Netflix or ordering less from Amazon because we didn’t get peace on earth.