Stocks closed higher yesterday, led by the Nasdaq with a gain of 0.90%. The S&P 500 was up 0.38%, and is just 0.64% away from their all-time highs made in early June.

Yesterday's better-than-expected Producer Price Index (PPI ? wholesale inflation) report showed inflation easing, just like the Consumer Price Index (CPI ? retail inflation) report did the day before. Headline PPI fell -0.3% vs. last month's downwardly revised 0.6% (from 1.1%) and views for -0.1%. The y/y rate was at 5.5% vs. last month's 6.5% and estimates for 6.2%. The core rate (ex-food & energy) was up 0.2% vs. last month's downwardly revised 0.1% (from 0.4%) and forecast for 0.4%. The y/y rate came in at 4.7% vs. last month's 4.9% and the consensus for 5.2%.

Like the CPI before it, headline numbers were down in large part due to falling energy prices last month. But the real positive was the core rate falling, which underscores the belief that structural inflation could be easing. A very positive development.

In other news, MBA Mortgage Applications showed the Composite Index off -2.7% w/w with Purchases down -7.3%, and Refi's up 3.5%.

And the Empire State Manufacturing Index improved to 15.6 vs. last month's 5.7 and outlook for 8.6.

Fed Chair Kevin Warsh, yesterday, gave his second day of semi-annual testimony, this time before the Senate Banking Committee. He hit the same points as he did before the House Financial Services Committee the day before. The Fed is committed to getting monetary policy right. Acknowledged that inflation is still too high. But noted the improvement that has been made. He also made it a point to emphasize his and the Fed's independence.

Today, on the economic report calendar, we'll get Weekly Jobless Claims, Retail Sales, the Philadelphia Fed Manufacturing Index, Business Inventories, the Pending Home Sales Index, and the Housing Market Index.

Middle East concerns continue. While President Trump scrapped his proposed 20% fee for the U.S. Navy to offer safe passage for ships transiting the Strait of Hormuz, he is keeping the Iranian blockade in place. And the U.S. continues to strike Iran, given their repeated attacks on commercial vessels, the latest of which killed one crew member and injured eight aboard an Emirati oil tanker.

Although, in a move that could signal a possible easing of tensions, Iran released a wrongfully detained American prisoner yesterday, who had been held since December 2024.

Earnings season continues. Yesterday we heard from more big banks. Morgan Stanley, BlackRock and PNC Financial all posted positive EPS surprises and positive sales surprise. They also all showed double-digit EPS growth rates (quarter vs. same quarter a year ago) with MS up 62.4%, BLK up 15.4%, and PNC up 26.0%.

Today we'll hear from an assortment of companies including Taiwan Semiconductor, UnitedHealth Group, GE Aerospace, Netflix and Abbot Labs. We'll also get more banks reporting with U.S. Bancorp, State Street and Citizens Financial Group posting results.

Should be another busy day.

See you tomorrow,