Stocks closed mostly lower yesterday, led by the Nasdaq's -1.46% loss. The Dow, on the other hand, eked out a tiny gain of 0.02%, after hitting new all-time highs earlier in the day. The S&P was off -0.58%.

Yesterday's Housing Starts and Permits report shows Starts improving with 1.428 million units (annualized) vs. last month's upwardly revised 1.358M (from 1.321M) and views for 1.290M. Permits, however, slipped to 1.354M vs. last month's 1.393M and estimates for 1.390M.

E-Commerce Retail Sales rose 1.4% q/q vs. the previous reporting period's -0.1% pace.

Today we'll get MBA Mortgage Applications, the Atlanta Fed Business Inflation Expectations, and the FOMC Minutes.

The FOMC Minutes will give us a glimpse into last month's Fed meeting when two Federal Reserve board members dissented on monetary policy by voting for rate cuts vs. the majority decision to hold rates steady. The two board members' dissent was the first time this happened (more than one dissent) in over 30 years. And we'll see what else might have been said at that meeting.

The Fed has sat on rates all year for fear of inflation rising due to tariffs. But the rise has been modest, defying fears of an elevated increase. In spite of the Fed's repeated concerns regarding inflation, they are still projecting two rate cuts this year (presumably by 25 basis points each). With only 3 more meetings left in the year (September, October and December), then it would appear that two of those three could result in rate cuts.

The odds of a rate cut at September's meeting stand at 86.9%.

In the meantime, earnings season continues.

Yesterday before the open we heard from Home Depot, who reported a negative EPS surprise of -0.64%, and a negative sales surprise of -0.50%. That translated to a quarterly EPS growth rate of 0.21% vs. this time last year, and a sales growth of 4.86%. They reiterated their full-year outlook with sales up 2.8%. They were up 3.17% yesterday.

Today we'll get another 131 companies on deck to report, including retailers Lowe's, The TJX Companies, and Target.

In other news, it was reported that the White House has expanded the 50% tariffs on steel and aluminum to included other categories. The Department of Commerce said an additional 407 new product categories will be covered, including heavy equipment like mobile cranes, bulldozers and railcars, and also smaller products and household appliances like dishwashers, stoves and microwaves.

The economy has responded well to tariffs in general so far this year.

In fact, roughly 84% of companies have beaten their earnings estimates in Q2. That's one of the best showings in years (although, Q2 earnings season is not yet over, but getting close).

Of course, one could speculate that estimates have been overly conservative with concerns over tariffs. And, as such, it was easier for companies to beat. But that would also suggest the concerns over tariffs were overdone and companies are not being affected the way so many had feared.

Either way, growth actuals and projections are showing things are well in corporate America. Q1'25 earnings were up 12.2%. Q2 is pacing at 12.0%. Q3 is forecast at 4.8%. Q4 is forecast at 6.3%. And Q1'26 is forecast at 8.5%.

Those are solid numbers, made even more impressive given the tariffs. And it shows the resilience of the U.S. economy and why stocks have been on a tear this year, with the expectation of more to come.

See you tomorrow,