Daily Commentary
Commentary prepared by Alloya Investment Services(opens in new tab), a division of the wholly owned CUSO of Alloya Corporate Federal Credit Union. Alloya Investment Services is a leading broker/dealer consultant to credit unions.
Friday, August 21, 2026 at 8:00 am CT
Commentary prepared by Tom Slefinger, Market Strategist
Market Indications
Other Market Indicators
| Market Indicators | ||
|---|---|---|
| 2s/5s Tsy Spread | 0.19 | -0.01 |
| 2s/10s Tsy Spread | 0.50 | -0.01 |
| 2s/30s Tsy Spread | 1.05 | 0.00 |
| DJIA-30 | 53,343.40 | -0.22 |
| S&P-500 | 7,691.76 | -0.69 |
| NASDAQ | 26,289.71 | -1.33 |
| Dollar Idx | 99.65 | -0.25 |
| WTI | 86.20 | -1.25 |
| Gold | 4,597.23 | +1.79 |
Daily Commentary
Recap — Yesterday had a little bit of everything: oil firmed, stocks and bonds sold off and the so-called Bessent rally in long Treasuries completely unwound. But the real headline was Walmart, whose stock was hammered 9%, its worst day in four years — as same-store sales rose just 2.6%, the weakest gain in more than six years. Wall Street and the Fed keep calling this “resilience.” Really? Transactions were positive, but the average ticket was weak — classic evidence of consumers trading down and buying less per trip.
Walmart remains the best read on the U.S. household, and the message is clear: The consumer, while not collapsing, is constrained. Retailers are telling the same story. Target has cut prices on roughly 10,000 items and is pushing more rollbacks, with most school supplies priced at or below last year’s levels. Walmart has also expanded price cuts to 11,000 items, up from 7,200 three months ago. That sounds a lot more like retail deflation than tariff-driven inflation.
Meanwhile, households are still absorbing gasoline prices 38% above pre-war levels and diesel 48% higher, with no real growth in employment or real disposable income over the past year. Savings are depleted, tax refunds are gone, and delinquencies remain elevated across consumer credit.
The inflation hawks may be in for a surprise. Core Consumer Price Index has slowed to a 1.6% annualized pace over the past three months — hardly a 1970s rerun. Wage settlements are running near 3.5%, not the 6%+ pace seen during the last inflation scare.
This is not a wage-price spiral. It is a supply-shock hangover. In a true inflation spiral, wages chase prices higher. Here, wage growth is cooling while prices remain elevated, meaning workers are taking the hit through squeezed real incomes — not forcing pay higher. That is not demand-driven inflation. That is household margin compression.
These are facts that nobody wants to hear because everyone has inflation on the brain. What is most disappointing is that this includes many Fed officials who should know better, because there is no theory or practice where inflation is sustained without the price shocks feeding into wages. It’s a basic premise that has become widely ignored.
Meanwhile, President Trump has made plenty of things “great” if the stock market is the only measuring stick. But bonds have come unglued, housing is stuck in a deep funk and the consumer is clearly under pressure. We will see whether the S&P 500 is on the ballot on November 3.
And most definitively, the president has not made the labor market great again. In fact, there has been zero net job creation over a 12-month time span. Wage growth for production and nonsupervisory workers has failed to keep up with headline inflation in each of the past four months.
Stay tuned and have a great day!
Economic Calendar
August 17 - 21, 2026
Future Fed Expectations
Source: Bloomberg
| Select Probabilities based on the Futures | |
|---|---|
| Probability of Fed Funds rate HIKE on September 16, 2026 | 32% |
| Probability of Fed Funds rate HIKE on October 28, 2026 | 22% |
**All quoted rates are indications and are subject to change without notice.
* ISI is a member of the FINRA/SIPC.
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