The Market Brief

The S&P 500 was on track for a second straight gain, sitting within reach of its all-time high.

Producer prices rose 4.7% year-over-year in July, below June’s 5.5% pace and better than expected, as energy and food costs fell further. Prices were unchanged month-over-month, according to Bureau of Labor Statistics data released Thursday.

The reading gives the Fed more room to balance inflation risks against a recent slowdown in hiring as it weighs whether to raise borrowing costs in September.

Retail’s back, but it hasn’t let its guard down. Retail returned as a net buyer last week, reversing the selling that closed out June. The cash equity capitulation impulse has faded, and participation is rebuilding.

But the more interesting signal is sitting in options: retail is buying the market again, but it is still paying for protection. That distinction matters. Participation has returned, but conviction has not fully followed. The chart below shows why.

Key takeaways: Retail is coming back to the market, but it’s doing so with one hand on the exit. The appetite is there, the confidence isn’t quite. History says that gap doesn’t stay open for long, it either closes into real conviction or into chasing.

In todays brief we break down what record SPX call volume is signaling about investor positioning as vol collapses. Subscribe to see how buybacks, systematic flows, and breadth are lining up behind the move.