Market Week in Review

Well, hi and welcome to Market Weekend Review for the week ending August 14th, 2026. I'm Paul Eitelman from Investment Strategy here at Russell Investments, and yeah, we're in the dog days of summer right now, but two developments stand out in financial markets this week. Uh first, we've had the continuation of the strong uh global [clears throat] equity market rally. And second, some pretty favorable US inflation data that has helped to support stronger performance out of US fixed income markets on the week. Starting with the strong equity market rally, uh sitting here on Thursday after the markets close in Seattle, we're tracking another weekly gain in US and global equity markets. The S&P 500 index is up around 6/10 of a percent on the week, uh but even better uh performance month-to-date here in August, we're tracking a rally of uh around 4%. So, really strong returns here in the summer period. Uh and a lot of that's really coming through from corporate earnings. Uh the second quarter reporting season uh is one of the best I've seen in my 20-year career. We're tracking really strong absolute earnings growth, strong guidance from management teams looking out into the third quarter, and encouragingly, it's very broad-based in terms of the fundamental strength we're seeing across the equity market right now. AI names are delivering strong earnings growth, non-AI names, large cap, small cap. We're seeing a lot of positive fundamentals here in breadth of that across um the equity market. The second uh notable development this week is around fixed income market. So, we had two important macro releases on the inflation side, consumer and producer price inflation for the US economy. Both of those undershot the consensus expectations of economists. And on the back of that softer inflation data, the market has started to price down the likelihood of the Federal Reserve needing to raise rates at their next meeting in September. At the beginning of the week, the market viewed that outcome as being close to a coin toss in terms of a hold versus a hike. Uh sitting here in on Thursday in Seattle, that the odds of a hike have dropped to about one in three. And on the back of that, we've seen Treasury yields decline and uh a bull steepening of the Treasury curve. So, bigger declines at the front end of the curve that are more sensitive to Federal Reserve uh policy. So, those were the two drivers for this week. Uh both of them uh being positive, healthy earnings supporting the equity market, softer inflation supporting uh the bond market. So, it's been a good time uh to be invested here in the north uh northern hemisphere summer. So, those are our key takeaways for this week. Uh thanks for tuning in to Market Week in Review, and we hope to see you again next time. Thanks a lot. Hi, I'm Sophie Antelme-Berck, Head of Portfolio and Business Consulting at Russell Investments. If you liked what you just saw and heard, consider subscribing to our YouTube channel or check us out on LinkedIn. Thanks for tuning in.