- Stocks finished the week on a high note, with traders wondering whether a slowing in inflation could prompt the Federal Reserve to slow the pace of its most aggressive tightening campaign in decades, averting a hard landing.
- Defying critics who dubbed the rebound a bear-market rally, short-covering, or hedge unwinding, the S&P 500 notched its fourth straight week of gains – the longest winning streak since November – with big tech leading gains on Friday.
- Wall Street's fear gauge collapsed as equities rose. The CBOE volatility index fell below 20, its average level since inception. The VIX fell for the eighth week in a row, the longest such streak since 2019.
- The next few weeks will be critical in determining the rally's viability. With earnings season nearly over, economic reports mixed at best, and many Fed speakers unwilling to sound too dovish, some analysts see the possibility of a breather.
- Flows are currently strong. Global equity funds attracted $7.1 billion in the week ending August 10, according to Bank of America strategists led by Michael Hartnett, citing EPFR Global data. Bond funds received $11.7 billion, while cash withdrawals totaled $4.3 billion.
