Financial Focus
August 17, 2026 

    GOOD MORNING!     The markets ended last week on a sour note on signs that the American consumer is retrenching.  The preliminary August University of Michigan Consumer Sentiment Index dropped on erosion of purchasing power and persistent pessimism toward current and future economic conditions.  They also voted with their feet as July’s retail sales revealed a unexpected and surprising decline.  The Treasury yield curve twisted steeper as yields on short-to-intermediate maturities fell while yields on longer term securities ebbed higher.  Supporting sector’s decline in yields were lowered market expectations for Fed rate hikes following the CPI and PPI reports suggest inflation may be cooling.    As the Strait of Hormuz remained effectively closed and saber rattling got louder the price of oil edged up approximately 5% on the week and competition from a heavy corporate new issuance, longer duration bonds added to their risk premium.  After hitting or nearing all-time highs, the benchmark equity indices ended the week narrowly mixed.    
     

     Both stock index futures and Treasuries are narrowly mixed, either stock in the summer doldrums or waiting on a catalyst to give them direction.  Today’s calendar won’t likely provide that.  All that is on tap is the August New York Fed Empire State Manufacturing Index, NAHB Housing Market Index and the auctions for $92 billion 3-month and $79 billion 6-month T-bills.