📅 Date: 16.08.2026
Three weeks in a row now. The S&P notched its third straight winning week, closing at its 27th record high of the year on Thursday before easing back slightly Friday. The Nasdaq managed a small gain too, though it was really the small caps that stole the show, the Russell 2000 jumped over 3% on the week and is sitting at fresh all-time highs of its own.
Wednesday’s CPI came in exactly where everyone expected, 0.1% monthly, 3.4% annual, nothing alarming. Thursday brought PPI, and this one’s worth a second look because the headline number and the detail underneath told slightly different stories. Headline producer prices were flat, actually a touch below what economists were looking for. But core PPI, the number that strips out food, energy, and trade, jumped 0.4%, up from just 0.1% in June. Nobody seemed to care. Markets read the tame headline, decided a September rate hike was even less likely, and pushed the S&P to yet another record.
Then Friday happened, and I think it’s the more interesting day of the two. Retail sales dropped 0.6% in July, the sharpest monthly decline since last May and well below the small gain economists were penciling in. On top of that, the University of Michigan’s preliminary August sentiment reading came in at 51, badly missing the 55 that was expected. People are feeling worse about the economy and spending less. Stocks dipped a little on the news, but only a little, the S&P gave back about 0.2%, hardly a dent after three weeks of gains.
Here’s what I keep turning over. This makes the second week running where genuinely soft data, first jobs, now retail sales and consumer sentiment together, got read as a reason to buy rather than a reason to worry. The VIX closed the week near its lowest levels of the entire year. That’s not necessarily wrong. Weak data does reduce the odds of a Fed hike, and lower rate expectations are a real tailwind. But I’d be lying if I said watching three consecutive soft economic prints all get shrugged off doesn’t make me a little uneasy about how much good news is already baked into these prices.
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The data calendar actually quiets down some next week, which after a stretch of jobs reports and CPI and PPI and retail sales all landing back to back, is honestly a bit of a relief. Retail earnings take over instead, Home Depot Tuesday, Lowe’s, Target, and TJX Wednesday, Walmart and Ross Thursday. After Friday’s weak retail sales number, these reports get read as the ground-level confirmation or contradiction of what that data point suggested. If Walmart and Target both talk about a cautious consumer, that retail sales miss starts looking like the start of a pattern instead of a one-off. If they sound fine, maybe July was just noisy.
For the system, it’s steady as it’s been for weeks now. Module 1 holds unless something breaks the trend outright. Module 2 and Module 3 are both watching for setups that a genuinely quiet week hasn’t handed them yet. If retail earnings shake things up enough to change that, you’ll know the same evening it happens.
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Have a good weekend.
Best,
Felix
Founder of The NASDAQ Playbook
This newsletter is for informational and educational purposes only and does not constitute investment advice, a recommendation, an offer, or a solicitation to buy or sell any security, or to engage in any investment strategy. Any views expressed reflect the author's personal opinions and research at the time of writing and may change without notice. All backtested performance data is simulated and does not represent actual trading results — past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Leveraged ETFs such as TQQQ are complex instruments that carry significant risk and are not suitable for all investors. The author may personally hold positions in one or more of the securities mentioned in this publication. This should be considered a potential conflict of interest. You are solely responsible for your investment decisions. Before acting on any information in this publication, you should conduct your own research and consider consulting a licensed financial professional, tax advisor, or legal advisor.
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