Inflation Data The Hero of Wall Street's Perfect Week

Cooler-than-expected inflation data delivered much-needed wins to Wall Street this week. The Dow Jones Industrial Average (DJI) broke out of its three-day losing streak  to start out the week, as Treasury yields slunk back below 4%. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) then joined the Dow higher, securing their highest levels since April 2022 after the upbeat consumer price index (CPI) reading for June.

Tailwinds continued to blow after last month's producer price index (PPI) reading was also softer than analysts anticipated, with the S&P 500 reclaiming the 4,500 level. At the time of this writing, a perfect week of gains was within reach as the major benchmarks hit 2023 highs, with upbeat bank earnings and preliminary consumer confidence data adding fuel to the week-long rally.

Busy Week for Brokerages

The brokerage bunch had a lot to say this week. Several analysts took a bullish stance on Wall Street rookie CAVA Group (CAVA), while beverage name PepsiCo (PEP) brushed off a pre-earnings bear note. Alternative energy staple SunPower (SPWR) was also under scrutiny, andBarclays urged traders to sell Coinbase Global (COIN) before its Aug. 7 earnings report. Zillow Group (ZG) saw an upgrade to "overweight," while firms praised chipmaker Nvidia (NVDA), predicted 20% upside for Netflix (NFLX), and upgraded Microsoft (MSFT) to "buy."

Options Activity Highlights

Advanced Micro Devices (AMD) call options have seen ramped up volume of late. Roku's (ROKU) options were also red-hot, after the streaming giant announced a new partnership with Shopify (SHOP).

Call traders chimed in heavily on Plug Power (PLUG), Sofi Technologies (SOFI) and Walt Disney (DIS) as well. Elsewhere, Schaeffer's Weekend Trader subscribers more than doubled their money with our DraftKings (DKNG) call recommendation.

Retail Sales, Slew of Earnings Ahead

Next week brings retail sales data, but the focus will be on the earnings docket. Several banks names are slated to report, including Bank of America (BAC), Charles Schwab (SCHW), and Morgan Stanley (MS). Results will also come from American Express (AXP), IBM (IBM), NFX, and EV firebrand Tesla (TSLA). Keep an eye on these 10 sectors that have underperformed, and see why inflation data was a litmus test for stocks.