| Inflation indexes showed mixed results this week – On Tuesday, the Consumer Price Index (CPI) for July was released. It showed that consumer prices rose 2.7% from one year ago, unchanged from June and below analysts’ expectations of a 2.8% increase. The core CPI rate, which excludes food and energy, rose 3.1% from one year ago. That was slightly above the 3% analysts forecasted. That was viewed very positively by investors. While the CPI rate has gone up from 2.3% in April to 2.4% in May and 2.7% in June and July, that was not as much as economists expected due to higher prices because of tariffs. Unfortunately, on Thursday, the Producer Price Index (PPI) was released. That showed that wholesale prices increased 0.9% month-over-month in July, the highest monthly increase since June 2022, when inflation spiked to its highest level since the 1980s. Year over year, the increase was 3.3% for headline CPI and 3.7% for Core PPI. The 0.9% month-over-month increase for both headline and core PPI took investors by surprise. Wholesale inflation is usually a precursor to consumer inflation, as the increase in cost is later passed on to the consumer. This monthly increase was so steep that investors took a wait-and-see attitude because it’s just a number that doesn’t look right. Bond yields and mortgage rates, which hit a 10-week low earlier in the week, rose a little at the end of the week after the PPI report, but nowhere near where they would have gone had investors not been skeptical of the PPI report.
Stock Markets – The S&P and the Nasdaq closed the week at record highs, and the Dow closed just shy of its all-time closing high – The stock market shrugged off inflation news on Thursday and rose after a strong retail sales report was released on Friday. Strong retail sales point to a strong economy. The Dow Jones Industrial Average closed the week at 44,946.12, up 1.7% from 44,175.61 last week. Year-to-date, it is up 0.9% from 44,544.66 on December 31, 2024. The S&P 500 closed the week at 6,449.80, up 1.6% from 6,389.45 last week. Year-to-date, the S&P is up 6.7% from 6,040.53 on December 31, 2024. The Nasdaq closed the week at 21,622.98, up 0.8% from 21,450.02 last week. Year-to-date, it is up 10.2% from 19,627.44 on December 31, 2024. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.33%, up from 4.27% last week. The 30-year treasury bond yield ended the week at 4.92%, up from 4.85% last week. We watch bond yields because mortgage rates follow bond yields Mortgage rates – Every Thursday, Freddie Mac publishes interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of August 14, 2025, were as follows: The 30-year fixed mortgage rate was 6.58%, down from 6.63% last week. The 15-year fixed was 5.71%, down from 5.75% last week. The graph below shows the trajectory of mortgage rates over the past year. July home sales data will be released next week by the California Association of Realtors and the National Association of Realtors. Those figures are available now on our website RodeoRe.com for your city, or zip code.Have a Great Weekend! |
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