🇺🇸 This is a more granular view of yesterday’s Producer Price Index numbers (left) and, since the increase was almost entirely in services, a more granular view of those as well (right).

In the second breakdown, you can see 0.6% of the increase in services is related to trade. This is from U.S. importers taking their tariff hit.

Up top, we have PPI MoM surprises (divergences from consensus forecasts) by standard deviations. July’s reading was 8σ off. That’s the largest since February 2021, and probably suggests there are some errors in the BLS’ assumptions (I know, no way!).

📊 CHART WATCH 📊

🇺🇸 Rate cut odds are still up month-to-date, but the PPI did not help…

Rate cut expectations for 2025 are down while those for 2026 have held steady.

📈 CHART WATCH 📉

🇺🇸 $XLV, returned to local range highs, rising 4.72% this week, including several gap days. The healthcare ETF is now breaking out of a down trend channel that stretches back a year.

This puts $XLV atop the sector leaderboard for this week with communications ($XLC, 3.76%) a close second on Meta’s strength. Consumer staples ($XLP, -0.35%) and utilities ($XLU, -0.33%) brought up the rear.

📈 CHART WATCH 📉