The economic calendar is normal with emphasis on inflation data and housing news. These routine reports continue in the background as the Washington headlines continue. We would all like to focus on markets, but the daily news flow emphasizes the turmoil. Many people are asking:

How can markets ignore the political turmoil?

Last Week Recap

My last edition of WTWA, I expected a focus on whether the US would launch a trade war. I also suggested that the original Administration tariff threats might well be eased in the face of complaints from allies, both at home and abroad. Both proved correct, helping us to maintain our stock positions.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. The Investing.com version of the S&P futures shows the action while the stock market is closed. The interactive version also lets you specify your choice of both time and intervals. Finally, there is a tag for significant news at various key points.

The gain this week included a 3.5% trading range, a bit lower than recent volatility. I summarize actual and implied volatility each week in the Indicator Snapshot.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations.

The economic news was very good. ISM services and the jobs numbers – both ADP and BLS – were excellent. The economic strength continues, but with less apparent pressure on wages. Everyone loved this employment report (Bloomberg) including the best source, Bob Dieli:

Establishment Survey: Strong on strong. Good internals. Wage growth still less than stellar. Expect more comment on this in the weeks ahead both from me and the punditry. This is what a jobs report is supposed to look like in an expansion.

The Calendar

We have a normal economic calendar with an emphasis on inflation data. Since I expect little concern on that front, I am more interested in housing starts, building permits, and retail sales. Like it or not, the Washington circus may well dominate the news – once again.