To The Moon

For the week ending 28 Aug 2026, US 3 major composite indexes closed moderately higher despite a late-week selloff. (see below)

3 Composite Indexes performances:

• DJIA : Ticked up +0.56% (+298.04 to 53,559.99).

• S&P 500: Advanced +0.63% (+48.38 to 7,711.76).

• Nasdaq: Led the weekly gains, rising +1.29% (+337.10 to 26,402.42).

Trading volume.

Trading volume during the week remained relatively muted, continuing a late-summer trend.

On the heavier-volume days like Thursday & Friday, roughly 14.9 billion shares changed hands across US exchanges.

This volume marked a slight contraction or stayed flat compared to the previous week's average, well below Wall Street's 20-session trading volume average of 16.3 - 16.6 billion shares.

Catalysts for the week.

The week was driven by a tug-of-war between (a) strong corporate earnings and (b) macroeconomic policy tightening fears.

(1) Nvidia's AI Boost:

• On Wed, 26 Aug 2026, AI-tech titan $NVIDIA(NVDA)$ reported a set of stellar earnings & revenue guidance, topping +110% YoY growth.

• This triggered a massive technology-led rally the following day, serving as the week's primary upside driver.

(2) Mixed Economic Indicators:

• US Fed’s preferred inflation index, the Personal Consumption Expenditure (PCE) rose the month of July 2026.

• The set of inflation reports for July 2026 sat slightly above consensus estimates and kept inflation concerns alive, spooking investors in the process.

(3) Fed Chair Kevin Warsh’s Jackson Hole Speech:

• During the annual Jackson Hole Economic Policy Symposium on Fri, 28 Aug 2026, Fed Chairman Kevin Warsh reaffirmed his commitment to a 2% price stability target.

• His warnings about stubborn inflation made a September rate hike more likely (over 50% chance). This drove Treasury yields up and caused stock prices to fall on Friday.

Reports out last Week.

• Tue, 25 Aug 2026 - Consumer Confidence for Aug 2026

• Wed, 26 Aug 2026 - US Gross Domestic Product (GDP) Q2 2026 - 2nd estimate

• Wed, 26 Aug 2026 - Personal Consumption Expenditure (PCE) for July 2026.

• Thu, 27 Aug 2026 - US Jobless claims.

• Fri, 28 Aug 2026 - U. Michigan Final Consumer Sentiments (Aug).

US Consumer confidence fell for a 2nd consecutive month, for August 2026.

It fell by -0.8 to 89.4 vs market analysts’ forecast of 90.3 vs July 2026’s downwards revised 90.2. (see above)

Latest read off also, marks a 7th month low, driven by a sharp increase in household anxiety, regarding (a) the future job market and (b) sticky cost-of-living pressures.

While the headline Consumer Confidence number indicates overall weakness, the drill-down reports reveal a massive, diverging "disconnect" between how Americans view US economy today versus how they view the next 6 months: (see above)

(1) Present Situation Index :

• Index measures current business and labour market conditions broke a 3-month downward streak.

• It jumped by +6.8 points to 121.2 for August 2026, providing a resilient counterweight to the softening headline data.

• And successfully reversed 3 consecutive months of deterioration from a downwardly revised July foundation.

• The primary driver was a robust improvement in current job sentiment.

• The closely watched labour market differential (percentage of consumers viewing jobs as "plentiful" minus those stating they are "hard to get") —rebounded significantly by 4.8 points to +7.5%.

• This signals immediate economic stability that outpaced market consensus expectations.

(2) Expectations Index :

• In contrast, the forward-looking sub index tracks 6-month outlook for income, business, and labour, fell by -5.8 points to 68.2.

• The sharp deceleration dragged future outlooks deeper below the historically critical recession threshold of 80.

• Drill-down details highlighted that net expectations for future business conditions sank to -6.3%.

• Future labour market sentiment dropped to -11.5%, weighed down by deteriorating outlooks on inflation, energy costs, and short-term job availability.

US’s Q2 2026 GDP.

On Wed, 26 Aug 2026, US Bureau of Economic Analysis (BEA) released US’s gross domestic product (GDP) 2nd estimate.

Real gross domestic product (GDP) increased at an annual rate of 1.5% in Q2 2026, in lined with market estimates of 1.5 and unchanged from the 1st estimate.

Compared to Q1 2026’s 2.1%, US economic growth has cooled ‘considerably’.

Key growth drivers include:

• Consumer Spending that picked up momentum in Q2, providing vital underlying support for US domestic economy.

• Business Investment with continuous capital injection, particularly into technology and AI infrastructure, bolstered activity.

Factors dragging down growth:

• Government Spending dropped during the quarter, creating a noticeable negative drag on headline GDP.

• Higher levels of imports offset strong domestic output and weighed on the final expansion figure.

While this marks a clear deceleration in top-line growth, the economy continues to expand positively.

Interesting, the price index for gross domestic purchases increased by +5.7%, reflecting the ongoing economic activity and the impact of other factors on the US economy.

Personal Consumption Expenditure (PCE).

Headline PCE:

• Increased a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 3.7%. Both were +0.1% above the Dow Jones consensus.

• It rebounded from -0.09% (June 2026) to +0.16% (July 2026).

• Wall Street expected a modest +0.1%; actuals overshot estimates, driven primarily by service inflation (+0.27% MoM) offsetting a decline in physical energy/goods prices (-0.11% MoM).

Core PCE :

• Posted respective gains of 0.2% (MoM) and 3.3% (YoY), in line with forecasts.

• MoM it was up from 0.15% in June 2026.

• On an annual basis, Core (3.3%) has minimum net change when compared to June.

• Disinflation has hit a plateau well above the Fed's 2.0% target.

Equally important, the report also showed that personal income rose +0.4% while spending increased 0.2%, both stronger than expected.

The report comes while the Fed officials are still weighing their next policy move as inflation is still well above the central bank’s 2% goal, despite generally soft monthly readings for the past few months.

Jobless Claims.

US jobless claims slid again last week, continuing this summer’s rollercoaster ride for unemployment levels.

Weekly.

For week ending 22 Aug 2026: weekly jobless claims were 203,000 vs consensus 208,000 vs previous week’s upwards revised of 207,000; that’s -4,000 lower. (see below)

4-Week Moving Average that smooth out noises was 205,500; that’s a +1,250 vs prior week’s 204,250.

Continuing.

For week ending 15 Aug 2026, continuing claims came in at 1,778,000 vs analysts’ consensus of 1,790,000 vs previous weeks downwards revised 1,796,000 - falling by -18,000 week-over-week.

Its 4-Week Moving Average was 1,788,000, holding steady when compared to prior period, pointing to a consistent level of insured unemployment without sharp spikes.

Summary.

Both reports reflect a healthy, resilient labour market.

The combination of low initial claims and stable continuing claims signals a "low-fire" environment.

Companies are still holding onto existing workers, and individuals receiving benefits are not seeing an acceleration in long-term unemployment roll growth.

Consumer Sentiments - Final.

Consumer sentiment falls in August 2026 after 2 previous months (June & July) of improvement.

The final August reading for the University of Michigan Consumer Sentiment Index came in at 51.7. (see above)

This marks a -6.3% (or -3.5 points) decrease from July and below the preliminary reading of 51.0.

Consumer sentiment sits -11.2% below where it was a year ago and it is currently below the 1st percentile in the series' history. (see below)

Key data breakdown.

The downturn was uniform across both current perceptions and future expectations, the 2 weighted average sub-indexes that make up the Consumer Sentiment index.

They are:

• Current Economic Conditions Index (weight ~60%). This measures (a) current personal finances and (b) whether it is a good time to buy major household items. It forms the heavy baseline of the main index

• Index of Consumer Expectations (weight ~40%). This measures outlook for (1) personal finances, (2) short-term business conditions, and (3) long-term business conditions over the coming months and years.

• It is more volatile and typically drives month-to-month changes in the overall sentiment index.

• The Current Economic Conditions Index fell -5.3% to 51.9, while the Consumer Expectations Index fell -7.0% to 51.5.

• On a ‘brighter’ note, year-ahead inflation “expectations” decreased to 4.0% from 4.2% in July. Although the decrease is a step in the right direction, nonetheless 4.0% inflation is still very high.

My viewpoints: (mine only)

After going through each of the US economic report and then reduce them to their essence (for your reading pleasure), this is my overall summary view.

The latest economic reports paint a clear picture of a stagflationary slowdown in the US economy.

The country is currently experiencing grinding, sub-par economic growth, hampered by sticky, policy-driven inflation and a darkening household outlook.

The US economy is stuck in a high-inflation, low-growth squeeze.

While a resilient labour market prevents an immediate recessionary spiral, persistent price pressures and decaying consumer expectations are creating severe headwinds for the quarters ahead.

Trump is trying very hard to drum up a positive outlook (heading into US mid-term election in November 2026) - for the mess he has created, announcing that US has secured Venezuela’s oil for the next 25 years. (see below)

Many analysts said it could take years to turn around Venezuela’s dilapidated energy sector.

It will not be an overnight sensation.

Eventually even Trump, who said the plan will reduce gas prices, acknowledged on Mon, 31 Aug 2026, that Americans won’t see change right away.

When asked about it at the White House, Trump said “it could be a little bit” for prices to fall, though he played down analyst predictions that it could take years.

“If it was two years, you know, that’s a short period of time,” he said.

On Sun, 30 Aug 2026, US restarted its assault of Iran, in a desperate bid to ‘maybe’ put an end to the war before heading into mid-term election ?

As a result, tension was stoked and flared again in the Gulf region, once again driving oil prices higher by easily +2.0% on Tue, 01 Sep 2026 alone. (see below)

IIn the meantime, US’s strategic petroleum reserves (SPR) has fallen to its lowest in decades. (see below)

When Trump decided unilaterally to attack Iran on 28 Feb 2026, he failed to ‘see’ that Iran will retaliate by closing off the Straits of Hormuz and in the process choke off oil needed to power global economies.

Because the oil market is entirely global, a shortage anywhere spikes prices everywhere.

On 11 March 2026, Trump requested a coordinated global intervention.

The International Energy Agency (IEA) and its 32 member nations agreed to dump a massive 400 million barrels of oil and refined products onto the world market to stabilize prices.

The 172 million barrels authorized by the Trump administration represented US contribution to this broader 400-million-barrel global package.

By pouring roughly 1.0 - 1.5 million barrels per day into the commercial system over a 120-day (4 months) delivery window, US successfully :

• Blunted the immediate economic damage of the blockade.

• Helped keep US average gasoline prices floating around $3.58 a gallon rather than surging past record highs.

It is not without consequences and now the SPR is facing a critical situation. (see above)

With the SPR now approaching what experts consider its practical operational floor of roughly 243 - 250 million barrels.

Dropping any further:

• Risks damaging the underground salt caverns, used to store the crude.

• Triggers statutory federal legal limits that restrict the President's ability to order routine drawdowns in the future.

The man is caught between the devil and the deep blue sea.

In short, the US economy is not out of the wood yet. One wrong move could further place it in a precarious position.

The deal with Iran to re-open the Straits of Hormuz is a necessity, 6 months into the war that should not have begin in the first place. Hindsight is indeed 20/20.

Investors must continue to keep abreast with both US economic data / reports and Trump’s next moves, given the fragile balance between stagflationary pressures & depleted strategic reserves.

With long-term Venezuela oil initiatives offering no immediate relief and reserve buffers at critical floors, any policy misstep or economic shock could easily spook markets and trigger a sharp self-correction.

Tracking the economic calendar and government actions becomes essential risk management. Agree ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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