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Big Earnings Week

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DOW – 66 = 21,513
SPX – 2 = 2469
NAS + 23 = 6410
RUT + 2 = 1438
10 Y + .02 = 2.25%
OIL + .66 = 46.43
GOLD + .50 = 1256.00
BITCOIN – 0.40% = 2767.87 USD
ETHEREUM – 0.66% = 223.18

Stocks were mixed, with tech shares leading the way and the Nasdaq Composite closed at another record high.

Commodities Futures Trading Commission data show that bets against the dollar are at their highest since early 2013, while bullish wagers on the 30-year Treasury bond are about the highest since mid-2016. The dollar dropped to 15-month lows and then rebounded slightly. The yield on the 10-year Treasury note moved up to 2.25%.

You probably would not expect to see such extreme positioning if investors were confident in the outlook for the economy and the prospect for much higher interest rates. The Federal Open Market Committee is slated to begin its two-day meeting on Tuesday. Fed watchers are not expecting a change in interest rates.

The Fed will likely be as vague and flexible as possible. The Federal Reserve doesn’t want to get specific about timing but they also don’t want to leave any doubt: The central bank still plans to raise interest rates again this year and start to sell off its vast holdings of Treasuries and mortgage-related bonds.

But the Fed has a problem – inflation, or the lack thereof. The Federal Reserve thinks modest inflation has important economic benefits, and it has aimed since 2012 to keep prices rising at an annual pace of 2 percent. The problem is that the Fed is on track to fail for the sixth straight year. And it might be a sign the economy just isn’t as strong as everybody hopes.

This week the government is expected to report a nearly 3% advance in second-quarter gross domestic product, the official scorecard for the economy. While that would mark a big improvement on 1.4% growth in the first quarter, it would leave the U.S. on the same 2% trajectory it’s been on since the end of the Great Recession. That’s less than two-thirds the nation’s historic rate of growth.

The IMF just cut its 2017 economic growth forecast for the U.S. to 2.1 percent from the 2.3 percent it estimated in April.

The National Association of Realtors reports existing home sales dropped 1.8 percent to a seasonally adjusted annual rate of 5.52 million units last month. Even as sales slipped, demand was strong, inventory was tight, and prices moved higher.

There were 1.96 million houses on the market last month, down 7.1 percent from a year ago. Housing inventory has dropped for 25 straight months on a year-on-year basis. The median house price jumped 6.5 percent from a year ago to an all-time high of $263,800 in June. It was the 64th straight month of year-on-year price increases.

A reading of U.S. manufacturing output reached a four-month high in July. The IHS Markit flash U.S. manufacturing purchasing managers index rose to 53.2 from 52 in June, as...