Major indices pulled back from record highs as the Street digests the latest economic data and the unfolding Fed Governor Cook legal battle.

Six sectors are moving higher, with Financials (XLF) leading, while Technology (XLK) is the laggard. The move lower in the Technology (XLK) sector is driven by Dell Technologies (DELL), after they reported earnings that showed mixed Q3 guidance relative to expectations.

Fed Governor Cook’s hearing concluded with no immediate ruling, the judge stated she will set an expedited briefing schedule.

Gold on Fire

For the first time in almost 30 years, foreign central banks are holding more gold than U.S. Treasuries.

Economic Data

Chicago PMI declined to 41.5 in August from 47.1 in July and below expectations of 46.

Notable Points:

• New orders fell by 10.8 points
• Production declined by 3.6 points
• Order Backlog lost 1.4 points
• Inventories declined 2.3 points
• Prices paid fell by 8.3 points
• Supplier Deliveries rose 5.8 points

The final Michigan Consumer Sentiment Report for August was revised lower to 58.2 from its preliminary reading of 58.6, and below last month’s reading of 61.7.

• 1-year inflation: 4.8%, consensus 5%
• 5-10 year inflation: 3.5%, consensus 3.9%

A closer look at this morning’s PCE report shows consumers are increasing spending in most categories, but namely automotive and financial services spending, which saw the largest rise. Meanwhile, the only categories to see declines were food services, as well as gasoline and energy goods, which fell the most.

As a reminder, the market will be closed Monday for Labor Day.

We want to wish everyone a spectacular Labor Day Weekend!

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