Rapid retail sales growth and a potential path for easing trade tensions boosted the U.S. markets at the end of a wild ride last week. July retail sales growth was 6.4% over the same month last year confirmed by Wal-Mart’s strong sales report. Additionally, the markets welcomed the end of week news that Chinese officials will meet with U.S. counterparts next week to work on practical measures to ease escalating tariffs ahead of the November summit between Trump and Xi. These bright points offset deeper global concerns that the worldwide economy will slow, sovereign debt levels will climb, and Turkey’s crisis will expand.

U.S. large and small cap stocks continued their year-to-date ascent, with small caps posting an impressive trailing one-year return of over 32%. However, there has been no shortage of dramatic corporate news. From Bayer’s bombshell – related to traces of its weed killer in cereal products – to Telsa’s backlash over tweets, we are seeing no signs that the U.S. market is complacent on its way up. Globally, international stocks were hit with a string of bad headwinds. Concern about Turkey’s escalating debt crisis sunk European bank stocks. With all the excitement in stocks this week, bonds have been doing what they do best over time – not much. Yields have stabilized as have bond prices.

Click on image below for a larger view.