Preliminary manufacturing and services PMI readings for August soared to their highest levels since early 2019. The housing market remained red hot in July with existing home sales rising more than 20% over June’s number. Despite an unemployment rate that’s still too high, the economy seems to be churning along again. Yet, the Treasury market remains unconvinced.

The biggest story of the past week has to be what’s been going on in the Treasury market. For months, Treasury yields have stubbornly refused to budge despite a 50% rally in the S&P 500. For the first time since early June, we’re seeing a meaningful rise in the 10-year yield. On August 6th, it hit an intraday low 0.504%. This week, it got as high as 0.727% before fading a bit at the end of the week.

For the first time in what feels like a while, we had what resembled a normal market last week. The ongoing rally in precious metals notwithstanding, the S&P 500 tacked on another 2.5%, pushing its year-to-date gain to nearly 4%. Utilities underperformed, small-caps outperformed and long-term Treasuries fell by 0.7%. The dollar rebounded towards the tail end of the week and the VIX continues to drift lower. For one week, at least, there were few mixed signals.