Last week brought modest gains for stocks and volume was underwhelming.  The Dow Jones Industrial Average rose 0.4% and the S&P 500 increased 0.1%, while the Nasdaq Composite was flat. Trade-war concerns surfaced again mid-week, as the Trump administration issued a new list of tariffs on $200 billion of Chinese goods, but the market was largely in rally mode ahead of second-quarter earnings. The Dow climbed 2.3%, the Nasdaq was up 1.8%, and the S&P 500 increased 1.5%.  Year-to-date, the S&P 500 is up 4.8% and the Dow has also turned positive with a 1.2% rise.

The 10-year Treasury yield ended Friday at 2.83% and remains range bound.  Last week’s economic news was mixed and included a modest decline in the small business confidence index for June from May’s strong reading.  Finding qualified workers appears to be the culprit for lower optimism.  The consumer price index moved higher by 0.1% in June and is now at 2.9% over the past year.  Medical care and autos were among the largest gainers while housing costs were flat and energy prices moved lower.  The takeaway, however, is that the inflation is running warmer than the Fed would like and it has justification to pursue its continuing rate hike campaign.

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