Stocks are running higher this morning with the four major indices all up at least half a percent. Concerns the delta variant will slow growth, unrest in the Afghanistan, Chinese crackdowns, weak retail sales on Tuesday, and Fed tapering talk seem to be some of the main culprits behind the Monday-Thursday selloff. However, market participants have a hard time resisting the urge to buy a good dip. A quick look at the daily S&P and Nasdaq charts will tell you that if you see red for two consecutive days, you should look for a place to buy a new low on that third day. We made a new low for the move in the early going yesterday before the buying came in. 

The debate about inflation continues to play out (so far deflation is winning). The Fed continues to say this is transitory, and many commodity markets seem to believe them. Next Friday’s Personal Income release will clue us in on how the Fed’s favorite measure of inflation (PCE) is tracking.  Regardless of the reading, I don’t expect Powell to back off his stance on the matter. We’ll get GDP data next Thursday, a day that also marks the beginning of the Jackson Hole Symposium.