Not Quite Peak Inflation remained stubbornly high in the latest August inflation report, despite falling energy prices. Stocks sank on Tuesday, with the S&P 500 tumbling more than 4%, the largest one day drop since June 2020. Over the week, S&P 500 fell more than 5% on fears that the Fed would still need to keep on its path of tightening for a sustained period of time. The market is expecting a hike of 75bps next week and a subsequent 50bps hike (vs 25bps) in November. The Good and the Bad Besides inflation, how is the US economy doing? Overall, things are not too bad. However, a point to note is that we tend to look at lagging indicators. Most economic measures are trending down, not falling off a cliff. Indicators to watch in the next few months would be layoffs and consumer sentiment as well as spending. Buying the Dip Some investors bought the dip, the most notable being Cathie Wood...