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Sept. 1 2017

After several weekly losses, all three of the major market indices ended in positive territory for the month of August with the Dow and S&P 500 being virtually flat. Last week provided a number of economic updates, and a report from Fed Chair Janet Yellen helped push the markets higher.

An upbeat data report pointed to strength in the economy and investors cheered Treasury Secretary Steven Mnuchin's comments on tax reform. President Donald Trump's administration has a detailed plan on tax reform and is still on track to execute the agenda by the end of this year, Mnuchin said. The remarks come on the back of Trump's speech, when he reiterated his longstanding call for slashing the U.S. corporate tax rate to 15 percent from 35 percent.

Earlier data showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.3 percent in July after a 0.2 percent gain in June. The upbeat consumer report comes a day after data showed the economy grew at its fastest pace in the second quarter in over two years.

So far, the outlook for the U.S. and the global economy remains relatively positive. Given that backdrop, equity markets are likely to grind higher over the next few quarters and pullbacks are likely to be bought by investors.

The fact that inflation remains below the Federal Reserve’s 2 percent goal will make it tougher for the Fed to raise rates in the fourth quarter.

Year to date the Dow was ahead 11.06 percent; the S&P 500 and NASDAQ were both positive 10.40 and 19.42 percent, respectively. The 10 year Treasury is currently yielding 2.15 percent.