Key Market Trends
Tip: Use this as a quick guide on the short-term direction (1-2 weeks) of key markets. It is not a signal to buy or sell, just to show the trend. This is a quick cheat sheet to know the trend and help understand what is happening with the markets in the short term. I started making this section years ago because once had a client that would call me nearly every day asking the direction of the markets.
Last | CHG % | CHG | HIGH | LOW | TREND | |
Dow | 34607.73 | −0.78% | −271.66 | 35104.25 | 34599.61 | Bear |
S&P 500 | 4458.57 | −0.77% | −34.70 | 4520.47 | 4457.66 | Bear |
Crude (WTI) | 70.35 | 1.11% | 0.771 | 70.753 | 69.499 | Bull |
Gold | 1788.37 | 0.06% | 0.99 | 1793.54 | 1783.55 | Bull |
10 Year | 133.10% | −0.97% | −0.013 | 1.35 | 1.324 | Bull |
Bitcoin/USD | 44298.05 | −0.99% | −443.23 | 44989.89 | 44182.78 | Bear |
US Dollar Index | 92.852 | 0.23% | 0.212 | 92.877 | 92.611 | Strong Bull |
VIX | 19.2 | −8.35% | −1.75 | 19.73 | 19.19 | Bull |
S&P 500 Sector Trends
Tip: Use this section to know the performance of various sectors, weight portfolios, or look for trades. Modern portfolio theory stresses the importance of diversification, but recently several sectors like technology have outperformed others like utilities. This is also a way to narrow the sectors to find investment opportunities.
REIT Alert: Due to Covid-19, there is a large percentage of people that have not paid rent or mortgages. Following the Supreme Court ruling stopping the eviction moratorium, we are very worried about the effect it could have on real estate investment trusts (REITS) value. Even though the sectors may trending bullish, we believe that REITs could have a significant drop in value.
Sector Name | 5-Day Return | 1-Month Return | 3-Month Return | YTD Return | YTD Return vs S&P 500 | 3-Year Return | 5-Year Return | Trend |
Basic Materials | -1.90% | -1.70% | -2.50% | 17.60% | -1.90% | 45.50% | 90.70% | Bear |
Communication Services | -1.30% | 2.40% | 5.60% | 23.60% | 4.10% | 79.60% | 75.90% | Bull |
Consumer Cyclical | -0.70% | 0.00% | 4.70% | 15.90% | -3.60% | 84.70% | 176.50% | Bull |
Consumer Defensive | -1.40% | 0.10% | 1.10% | 8.30% | -11.20% | 41.90% | 56.40% | Neutral |
Energy | -1.70% | -3.20% | -12.70% | 32.50% | 13.00% | -24.40% | -16.80% | Bear |
Financial Services | -1.60% | -1.80% | 1.20% | 28.40% | 8.90% | 39.30% | 106.30% | Bear |
Healthcare | -2.60% | 0.70% | 5.90% | 16.40% | -3.10% | 54.60% | 112.50% | Bear |
Industrials | -2.50% | -2.10% | -1.40% | 15.10% | -4.40% | 38.30% | 94.70% | Bear |
Real Estate | -4.10% | 1.00% | 1.60% | 26.90% | 7.40% | 43.40% | 51.50% | Bear |
Technology | -2.00% | 2.00% | 10.90% | 19.30% | -0.20% | 118.60% | 284.30% | Neutral |
Utilities | -1.70% | 1.00% | 3.70% | 10.10% | -9.40% | 34.80% | 64.60% | Neutral |
Key Drivers for the Week of Sept. 13, 2021
TIP – This is a 1-minute brief bullet-point summary. It is a tool that gives investors and financial a fast and simple list of what to watch for and talking points for the week.
- Q3 growth estimates revised lower amid drags from Delta, supply constraints
- Capital Hill infastructure bill & debt ceiling battles
- Central banks generally move cautiously toward reducing pace of QE
- U.S. data on retail sales, production to reflect slowing in activity, CPI firm
- Canada focus turns to CPI data, along with manufacturing, shipment reports
- China production, investment, sales data to extend softening trends
- Japan business outlook survey expected to erode further, PPI seen rising
- Eurozone CPI seen at 3% y/y, above ECB 2% target, due to special factors
- UK August CPI expected to jump to 2.9% y/y; retail sales bouncing 0.8%
Stocks & ETF Watch List
Tip: Use this section to find stocks and ETFs to add value to your portfolio by increasing the alpha (return) and decreasing beta (beta). Our list is updated monthly to help provide our readers with timely insights. Readers should do their own research before making any investment. In order to make our report easier to read, we are now including the stocks as lists for readers in separate posts.
- Inflation Stock Picks: List of stocks that we think should perform better in a rising inflation environment. Click here
- Auto Parts Stock Picks: Auto parts companies are likely to see their stocks rise as the average age of cars and light trucks increased from 11.9 years in January 2017 to 12.2 years in January 2021, according to new data from IHS Markit. Below are the top auto parts companies that investors should buy now before the profits roll in. Click here.
- Solid Picks: This group of stock/ETF picks is likely to experience growth and perform well into the near future. Click here.
- Dividend Stocks: List of stocks that have excellent dividends and business performance. Click here.
- Dividend Growth Stocks: List of stocks that have a history of growing dividends. Click here.
- Dividend ETFs Picks: This list of ETFs is selected for their ability to pay dividends. Click here.
- Dogs of the Dow: This list of DOW stocks based on H. G. Schneider’s Article in the Journal of Finance in 1951 that used the price-earnings ratio. The general idea is that blue-chip companies that pay a dividend are more likely to withstand an economic downturn. Click here.
Week Ahead: CPI, Debt Ceiling & Taxes
NORTH AMERICA
The US calendar picks up with several key data reports including CPI, retail sales, and manufacturing/production numbers. Attention will also be on Capitol Hill as the infrastructure bill and the debt limit will also be on the markets’ mind. Rising inflation is leading to more mentions of future stagflation.
Wall Street had its worst week in months as growth projects were revised lower after the poor jobs report. The Dow dropped -2.36% and the S&P 500 was off -1.7%, while the NASDAQ slid -1.4%. Comments from the Beige Book also reflected the downside risks, noting the deceleration in economic activity and largely attributing it to a pullback in dining out, travel, and tourism.
Weakening was also see resulting from supply constraints and labor shortages, which are also boosting price pressures.
Meanwhile, on Capitol Hill, lawmakers will be working on a $1 tln infrastructure package, a $3.5 tln social spending package, while also maneuvering with the debt limit. The uncertainty in DC will increase volatility in the equities markets.
The increased spending will be paid for by $1.5 trillion in tax hikes. There are several being considered. The most likely ones are increasing the corporate tax rate from 21% to 26% and a special tax on people earning more than $5 million per year. Also being considered are new taxes to pay for roads, such as special usage taxes.
If the corporate tax increases are passed, they will likely affect the earnings in 2022. It does not appear that the market has priced in increased taxes.
I think the biggest threat to the markets will be the battle in DC over raising the debt ceiling. Republicans appear to be publically opposed to increasing the debt ceiling. Meanwhile, Democrats are putting off the issue of debate strategically to force it through on the basis of avoiding a government shutdown.
Republicans will likely continue their stance given Biden’s recent failure in Afghanistan and national vaccine mandate. He is at historic lows in approval. A shutdown will cause a huge amount of chaos in the markets. Rising inflation fears will add fuel to the fire. It could trigger a much overdue pullback.
Market pullbacks of 5% are very common, and we are now 351 days into a bull trend, the second largest of 357 days in 2002. We have been over a year since the S&P 500 touched the 200 moving average.
The upcoming economic reports will add to the Fed’s calculus ahead of the September 21-22 FOMC meeting, but given downside risks and comments from Chair Powell that “substantial slack” still remains in the labor market, it is unlikely the Fed will announce QE tapering at this time.
August retail sales (Thursday) are expected to decline -0.8%, while sales excluding autos should dip -0.2% following respective July decreases of -1.1% and -0.4%, largely due to supply shortages and waning stimulus. We see industrial production (Wednesday) rising 0.3% in August after climbing 0.9% in July.
Gains in mining and utilities should be offset by weakness in manufacturing and auto production as chip shortages remain a major drag. The Empire State index (Wednesday) should ease to 18.0 in September after plunging -24.7 points to 18.3 in August from the 43.0 all-time high in July. The Philly Fed index (Thursday) is seen slipping to 19.0 in September after the -2.5 tick decline to 19.4 in August, versus a 48-year high of 50.2 in April.
We expect August gains of 0.4% for the CPI (Tuesday) headline and 0.2% for the core, after respective July increases of 0.5% and 0.3%. As-expected August figures would result in a 5.3% headline y/y increase, following a 5.4% pace in July and June. Core prices should show a 4.1% y/y rise, slowing from 4.3% y/y in July. Widespread production bottlenecks are lifting all the broad inflation metrics in 2021.
We expect respective PCE y/y chain price gains of 4.2% and 3.5%. The Fed continues to interpret the inflation spike as transitory, though it’s unclear if upward commodity price pressure will abate much before early 2022. Also, import and export prices (Wednesday) are expected to rise 0.3% and 0.4% respectively in August, after July gains of 0.3% for imports and 1.3% for exports.
In Canada, the calendar is empty to start the week. The August CPI report will be the focus. While growth has stumbled, supply chain issues and the delta variant have continued to fuel inflation — we expect CPI (Wednesday) to accelerate to a 3.9% clip in August from 3.7% in July (y/y, nsa). CPI is projected to grow “only” 0.1% in August (m/m, nsa) after the 0.6% jump in July.
However, we would note that month comparable CPI has fallen -0.1% in August in each of the past three years. As such, our 0.1% month comparable estimate is consistent with elevated/rising price pressures in Canada.
Manufacturing (Tuesday) is expected to drop -1.5% in July after the 2.1% bounce in June. Housing starts are pegged at 265k in August from 272k in July. Wholesale shipments (Thursday) are seen falling -2.0% in July after the -0.8% loss in June. The existing home sales report for August is expected on Wednesday.
There is nothing from the BoC this week. The bank’s announcement last week delivered the expected steady 0.25% rate setting and lack of change to QE as the government accesses the impact of Delta and awaits the election. Governor Macklem, speaking the day following the announcement, detailed the bank’s QE exit strategy.
While the details were of interest, he did not change the base-case policy outlook of steady rates for a still extended time period with another cut to QE possible in October depending on the flow of growth and inflation data.
ASIA
Covid and its myriad impacts continue to hit Asia and resulting slowing in economic activity will likely show up in this week’s data calendar. China’s docket is of interest, and features August industrial output, retail sales, and fixed investment. All are expected to reveal further softening on the month. Japan releases August PPI and trade. Elsewhere, a light calendar features, prices, trade and employment data. There are no regional central bank meetings scheduled.
China August industrial output (Wednesday) is expected to slip to a 5.9% y/y pace from 6.4% in July. This would mark the sixth straight month of slowing after surging to a 14.1% pace March. August fixed investment (Wednesday) is forecast at a 9.0% y/y pace from 10.3%. The rate of growth has been sliding for five months as well after surging to 35.0% in February. August retail sales growth (Wednesday) should ease to 7.8% y/y from 8.5%. Sales also have been decelerating this year and are down from the 34.2% rate from March.
In Japan, the quarterly MoF business outlook survey (Monday) is estimated dropping to -5.0 in Q3 from -4.7 in Q2 and -4.5 in Q1. Meanwhile, August PPI (Monday) likely accelerated further to a 5.7% y/y clip from 5.6% in July. Prices bounced to a 1.2% y/y pace in March, breaking out of the deflationary posture that had been in effect from March 2020 through February 2021. Revised July industrial production (Tuesday) should be little changed at the -1.5% from the preliminary read where it dove from the 6.5% jump in June. The July tertiary industry index (Wednesday) expected to increase 1.5% after bouncing 2.3% in June. The August trade report (Thursday) should see the surplus nearly unchanged at JPY 440.0 bln from JPY 439.4 bln.
India August CPI (Monday) is estimated at an unchanged 5.6% y/y clip and has slowed from the better than 6% y/y rats in May and June. August WPI (Tuesday) is forecast to have cooled slightly to 11.0% y/y from 11.2% and is down from 13.1% in May. The August trade report (Wednesday) is expected to see the deficit widen to $12.0 bln from $11.0 bln. South Korea August unemployment (Wednesday) is penciled in at 3.4% from 3.3%. The rate has been sinking all year from the 5.4% rate in January, which was the highest since late 1999. Indonesia August trade (Wednesday) has the surplus at $2.5 bln from $2.6 bln previously. Hong Kong August unemployment (Thursday) should see an unchanged 5.0% rate. It was at a 7.2% pace in February. Singapore August non-oil exports (Friday) are forecast rising to a 13.0% y/y rate from 12.7% previously.
In Australia, the NAB business confidence index for August is slated (Tuesday). It crashed to 11.4 in July amid rising covid problems and renewed lockdowns, from 24.9 in June and 34.5 in May. Employment data for August is due (Thursday) and jobs should inch up 2k following the 2.2k increase in July. The unemployment rate is expected to be steady at 4.6%. It’s been heading south nearly every month since jumping to 7.4% in June 2020. New Zealand has Q2 current account (Wednesday), GDP (Thursday), and the manufacturing PMI (Friday).
EUROPE
Eurozone: the ECB meeting is out of the way and markets clearly were relieved that the central bank “only” scaled back monthly asset purchase targets, but without capping the PEPP envelope and with postponing the decision on the future of the emergency program until December. That gives the ECB a lot of time to monitor virus developments and the prospects for global growth and the local inflation outlook. Against that background this week’s round of data releases won’t really change the outlook for monetary policy and with the last decision taken unanimously there is also not much merit watching central bank comments for a flavour of the discussion.
The usual hawks are pushing for a timely end to PEPP, but the key players are reserving their judgement for now, and will continue to sit on the fence through October and November. Comments from Lane (Wednesday) and Rehn (Thursday) are likely to frame the September 9 decision, rather than giving clues on the outlook.
Eurozone September CPI inflation (Friday) is expected to be confirmed at 3.0% y/y, above the ECB’s 2% target, but largely driven by special factors including Germany’s temporary VAT cut last year and higher energy price inflation that is driven by global supply shortages. Core inflation is holding at 1.6% and the numbers will already have been part of the ECB’s assessment and the upward revisions to the growth and inflation forecasts released by the central bank yesterday.
Other data releases are even more backward looking. The trade surplus (Thursday) is likely to have widened in July and Eurozone industrial production (Wednesday) is also expected to have rebounded from the contraction in June. The calendar also has national inflation numbers for Spain, France and Italy.
U.K.: Gilt yields moved higher last week as bonds were spooked by a report highlighting an increasingly tight labour market that is forcing companies to up pay offers. With the ECB scaling back asset purchases and markets fretting about the approach of a turnaround in the global policy cycle, investors are likely to be cautious ahead of the September 23 BoE announcement, and while the BoE already signaled a slightly more hawkish shift on the rate outlook at the previous meeting, the new chief economist could add another layer to this. Sterling markets in particular seem to banking on an increasingly hawkish BoE and this week’s data releases will likely play into this.
U.K. CPI (Wednesday) is expected to jump to 2.9% y/y (median same) in the August reading, essentially mirroring moves seen in the Eurozone and as there largely driven by special factors related to the pandemic. Still, with core inflation expected to jump to 2.8% y/y, the numbers will add to concerns that inflation could fuel wage increases in the current climate and thus lead to second round effects.
This week’s round of labour market data is less up to date than industry reports, but will still be watched very carefully and the ILO unemployment rate (Tuesday) is expected to drop back again. Official wage data has been very high, but like CPI readings partly reflects special factors related to virus developments and government support measures. These are now being phased out gradually and it remains to be seen how the labour market develops without the official stimulus. U.K. retail sales (Friday) are also due and are likely to show a 0.8% rebound in August from the -2.5% decline in July.
Switzerland: The calendar is once again pretty quiet this week, although it includes the updated round of the SECO forecasts, which will be interesting ahead of the SNB meeting on September 23.
Data Week of September 13
We have a heavy release schedule in the middle week of September. We assume August retail sales headline and ex-auto declines, as the stimulus boost continues to wane, while business inventories climb in July, as seen in May and June. We expect another solid industrial production gain in August, led by a weather boost, alongside a capacity utilization climb. We expect further August gains for CPI and the trade price indexes. The Empire State and Philly Fed indexes should ease further, but Michigan sentiment is expected to bounce slightly in September.
Week of September 13
Support for the $3.5 tln reconciliation bill continued to dwindle through the week, leaving the likelihood that we’ll only get the bipartisan bill plus a much more limited reconciliation bill with the debt limit extension. Our assumption is that the remaining legislation for 2021 will have little impact on the near-term economic outlook, leaving a likely downward glide path for GDP growth from a stimulus-induced recent-peak of 6.6% in Q2, which we assume will be boosted to the 6.9% area, down to the 3% area by the end of 2022. We assume that upward pressure on inflation rates nationwide will subside alongside the GDP growth pace, though the speed of this pull-back will dictate how much inflation expectations will rise through the period. Big monthly price gains, as seen yet again in this morning’s PPI report, lock in big y/y increases well into 2022.
Fed tapering will unfold alongside the GDP growth pull-back, and some may link what we would see as the inevitable moderation in GDP growth with diminishing surplus capacity to the reduced accommodation from the Fed. This perception is unlikely to deter the taper, but it may give the Fed pause through 2022 as it rotates toward discussing the start of rate hikes. We assume that any signals of Fed rate hikes will be pushed past the U.S. midterm elections.
As the boom-times of 2021 abate, some fundamental shifts in the structure of the economy since the start of the pandemic will become more apparent. We will face sustained tight resource constraints in suburbs as the economy in those areas continues to burst at the seams, alongside hollowed-out urban areas that are unlikely to return to anything like prior utilization rates. Suburban housing developments are now being planned that will fuel construction through 2024, hence ensuring that the boom in these regions continues. It will be difficult for urban properties to compete with this incoming supply. This growth dichotomy will provide the backdrop for both the 2022 midterms and Fed discussions of possible rate hikes. The result may be an even more polarized electorate, and a wider hawk-dove split in the FOMC.
CPI/Core: 0.4%/0.2%
We expect August gains of 0.4% for the CPI headline and 0.2% for the core, following July gains of 0.5% for the headline and 0.3% for the core. CPI gasoline prices look poised to rise 2.8% in August. As-expected August figures would result in a 5.3% headline y/y increase, following a 5.4% pace in July and June. Core prices should show a 4.1% y/y rise, down from 4.3% y/y in July. Widespread production bottlenecks are lifting all the broad inflation metrics in 2021, such as PPI and the trade price indexes, alongside a boost to the y/y figures since Q2 from base effects though we have yet to see the long-awaited peaks before the start of a pull-back into year-end. We expect respective PCE y/y chain price gains of 4.2% and 3.5%. The Fed continues to interpret the inflation spike as transitory, though it’s unclear if upward commodity price pressure will abate much before early 2022.
Empire State/Philly Fed Index: 18.0/19.0
The Empire State index should ease to 18.0 in September after plunging to 18.3 in August from the 43.0 all-time high in July, versus a 7-month low of 3.5 in January. The Philly Fed index is seen slipping to 19.0 in September after a drop to 19.4 in August, versus a 48-year high of 50.2 in April, and a previous 11-month high of 30.1 in January. We’re seeing a broad pull-back in sentiment from Q2 highs as the lift from stimulus and vaccines wanes, but levels have thus far remained robust. These diffusion indexes will be supported into late-2021 as factories face the ongoing need to rebuild inventories, though supply chain disruptions have increased recently with mounting coronavirus restrictions in Asia. Demand for most industries in 2021 has rebounded well above pre-pandemic levels.
Import/Export Price Index: 0.3%/0.4%
Import and export prices are expected to rise 0.3% and 0.4% respectively in August, after July gains of 0.3% for imports and 1.3% for exports. Ex-petroleum import prices are expected to grow 0.6%, while ex-agriculture export prices grow 0.5%. Oil prices rose sharply into early July in the face of booming global demand and tight inventories, alongside a wide array of broader commodity price gains due to global capacity constraints and supply chain disruptions, though these upward pressures have moderated in August by fears over the delta variant. A downtrend in the value of the dollar into 2021 also aggravated the outsized trade price climb since December. Trade price gains have contributed to the shift in market focus toward upside inflation risk in the first half of 2021, though these fears will likely diminish into 2022 as some price overshoots with supply chain distortions are reversed.
Industrial Production: 0.3%
Industrial production is projected to rise 0.3% in August after climbing 0.9% in July. We saw July increases of 1.4% for manufacturing and 1.2% for mining, but a -2.1% decline for utilities. In August, we expect increases of 0.5% for mining and a weather-led 3.0% rebound for utilities, but a -0.1% drop for manufacturing. We expect the vehicle assembly rate to fall to a 9.2 mln pace in August from 9.7 mln in July, with big headwinds from ongoing semiconductor shortages. We saw a 0.1 mln trough pace in April last year, versus a 3.7 mln prior trough in January of 2009 that marked the start of the auto bankruptcies. Mining output should continue to rise, alongside the uptrend in the Baker-Hughes rig count. Capacity utilization should rise to 76.3% from 76.1% in July. Industrial production expanded at a 6.1% clip in Q2, and we expect growth rates of 6.6% in Q3 and 3.9% in Q4.
Retail/Ex-Auto Sales: -0.8%/-0.2%
We expect a -0.8% August retail sales headline drop with a -0.2% ex-auto decline, following respective July decreases of -1.1% and -0.4%, as the March pop from stimulus checks continues to unwind. We expect a 2.8% increase for the CPI gasoline index that should support service station sales. Unit vehicle sales slowed sharply, to an inventory-constrained 13.1 mln pace from 14.6 mln in July and a 16-year high of 18.3 mln in April. We expect a steady pull-back in retail sales into the end of Q3 as we further unwind the powerful boost from Q1 stimulus, though service sector activity should continue to expand. Real consumer spending is expected to grow at a 1.8% rate in Q3, after rates of 11.9% in Q2 and 11.4% in Q1.
Initial Jobless Claims: 315k
Initial jobless claims are expected to rise 5k to 315k from a 310k cycle-low in the week of September 4. Claims tightened in early-July, widened in late-July, and tightened significantly again through August due to counter-swings relative to the auto retooling seasonal pattern, which likely didn’t occur much this year due to semiconductor shortages. Claims are poised to average 313k in September, after 352k in August, 394k in July, and 394k in June. The 349k August BLS survey week reading was well below July’s reading of 424k, as well as the 418k in June, 444k in May, and 566k in April. We assume a 475k September payroll rise, following the lean 235k August gain, but prior outsized 1,053k July increase.
Continuing claims fell by -22k to a 2,783k cycle-low in the week of August 28, following an upwardly revised 2,805k figure. We expect continuing claims to decline -43k to a 2,740k new cycle-low for the week ending September 4. Continuing claims have fallen sharply since late-July, and we assume some flattening in this steep downtrend into Q4. We expect continuing claims to fall by about -210k between the August and September BLS survey weeks, after drops of -388k in August, -116k in July, -199k in June, -42k in May, and -188k in April.
Business Inventories: 0.5%
Business inventories are expected to grow 0.5% in July after a 0.9% (was 0.8%) June gain. Our forecast incorporates gains of 0.5% for factories, 0.6% for wholesalers, and 0.4% for retailers, as shown in the advance indicators report. Sales should grow 0.3% in July, after a 1.5% bounce in June. As-expected readings would result in the July I/S ratio remaining at the 9-year low of 1.25 in June that was also seen in April, versus an all-time high of 1.72 in April of 2020. We saw a -$169.4 bln liquidation rate in Q2 that subtracted -$81.1 bln from Q2 GDP growth. Inventories are rebounding sharply into Q3, after inventory liquidation in four of the six quarters through Q2. Inventories started to unwind pre-pandemic as earlier tariff front running reversed course before the big COVID hit, leaving room for a sustained inventory rebound through the rest of 2021.
Michigan Sentiment, Preliminary: 72.0
We expect the preliminary Michigan sentiment report to rebound to 72.0 after an August drop to a 10-year low of 70.3 that undershot the pandemic-bottom of 71.8 in April of 2020, versus a cycle-high of 88.3 in April. We expect expectations to rebound to 67.8 from an 8-year low of 65.1 in August, versus an 83.5 cycle-high in June. We expect current conditions to improve to 78.6 from a 16-month low of 78.5 in August, versus a 97.2 cycle-high in April. The 1-year inflation gauge should tick down to 4.5% from 4.6% in August and a 13-year high of 4.7% in July. The 5-10 year inflation measure should sustain the August rise to 2.9%, versus a 10-year high of 3.0% in May, and previously in 2013. Confidence faces a mounting headwind from the delta variant, resumed mask requirements, and events in Afghanistan, while the prior confidence updraft with stimulus and vaccines has dissipated since April. We saw drops in all the major confidence measures but the Langer measure in August, following declines for all the measures in July.