Dow Posts New All-Time High; Retail Sales Miss, Inflation Higher In August

With a 45-point gain on Thursday, the Dow Jones Industrial Average set a new all-time closing high (22,203.48), putting an exclamation mark on what has been an incredibly fruitful week for investors.

With a small gain last Friday, the Dow has now gone five straight sessions without posting a loss. The blue chip average is up 405 points for the week (1.86%) and despite some discouraging data prior to Friday's open, it appears set to finish the week on a healthy note.

The data Friday morning that sent futures lower was a pickup in inflation according to the CPI figures for August, showing a 0.4% increase, due largely to a spike in retail gas prices and a 0.5% increase in the rent factor. On a year-over-year basis, the index is up 1.9%, closing in on the Federal Reserve's two percent target rate.

Retail sales were down 0.2% in August, with the largest contributor to the decline the drop in auto sales which slumped 1.6% for the month after being flat in July.

With inflation up slightly (and understandably) and sales down, the Fed will find itself once again in a box on rate increases and likely do nothing when the FOMC meets next week. Some mention of the winding down of their enormous, $4.1 trillion balance sheet is expected and that could move markets, although the Fed has been extremely cautious to commence the wind-down as it could spark inflation, a market selloff or other unforeseen consequences.

Nonetheless, stocks are poised for another solid week while the economy appears to be slowing gradually during the third quarter.

At the Close, Thursday, September 14, 2017:
Dow: 22,203.48, +45.30 (+0.20%)
NASDAQ: 6,429.08, -31.10 (-0.48%)
S&P 500: 2,495.62, -2.75 (-0.11%)
NYSE Composite: 12,062.62, +7.44 (+0.06%)