Today's post is from Sam Millette, a fixed income analyst on Commonwealth's Investment Management and Research team.

Today's post is from Sam Millette, a fixed income analyst on Commonwealth's Investment Management and Research team.

Brad here. Today's post is from Sam Millette, a fixed income analyst on our Investment Management and Research team. Over to you, Sam.

Last week, several important economic data points were released, covering major components of the economy. Much of this news came in better than expected, and the overall economic picture suggests accelerated growth in the second half of the year.

Last week, the only major economic report was on consumer prices, released on Friday. Overall, this month’s data suggests that inflation remains low but is not dropping further. Therefore, the Fed will remain watchful, and it isn’t likely to increase rates in September but may well start the balance sheet reduction program.

After three consecutive days of market declines fueled by tensions with North Korea, the major U.S. indices were up on Friday. Is recent performance simply normal market action, or is it a sign of something worse to come? 

We saw a wide range of economic news last week, including a detailed look at consumer income and spending; business confidence in both the manufacturing and service sectors; the international trade report; and, most important, the July jobs report. While there are some areas of concern, the jobs report suggests that the recovery continues.

It seems like just a couple of months ago that I was writing about record highs for the Dow. In fact, looking at the data, it was only a few months ago, on January 26, that I wrote about Dow 20K. Reviewing that post, it notes that I last discussed stock market records 58 days before that. Are we seeing a pattern here?

Last week gave us another look at the housing market, with reports on sales of existing and new homes. Also, the durable goods orders provided a window into industry and business confidence, while the first estimate of GDP for the second quarter revealed the growth of the economy as a whole. Overall, the news was mixed but positive.

This week is an important one for earnings season, with a large number of S&P 500 companies due to announce their results for the second quarter. Given all the political turmoil in DC, should we expect company earnings to follow suit? Or have we already seen all the bad news?

Last week was all about housing, and the news was mixed. Although industry sentiment showed a surprising drop, actual activity came in stronger than expected. Overall, the data probably shades to the good side, but housing bears watching going forward.