Thursday’s report on consumer inflation for June is expected to show that the recent firming trend will roll on. Analysts are looking for the year-over-year rate in headline prices to tick up to the fastest pace in over six years. It’s easy to overstate the rebound in pricing pressure, which appears dramatic after flirting with a mild degree of deflation as recently as 2015. But the rise from a low base still leaves inflation at a moderate rate relative to history. Nonetheless, the numbers clearly show that reflation is in progress — a trend that will increasingly ratchet up pressure on the Federal Reserve to tighten monetary policy.
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Trump picks Brett Kavanaugh, a solid conservative, for Supreme Court: The Hill
Ahead of Nato summit, Trump criticizes members on defense spending: Politico
China’s producer inflation accelerated to six-month high in June: Reuters
UK growth picked up in May: MNI
German economic sentiment suffers sharp pullback in July: Investing.com
Turkey may be the most vulnerable emerging market: NY Times
Lowest-rated tranche of inv-grade US corp bonds flash econ warning: Bloomberg
US consumer credit in May rose the most in six months: Bloomberg
10yr-2yr Treasury yield curve held below 30 basis points on Monday:

Positive returns dominated the first week of trading in July for the major asset classes, based on a set of US-listed exchange-traded products. With the exception of broadly defined commodities, every corner of finanical markets posted gains for the trading week through July 6.
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Trump close to decision on naming a new Supreme Court justice: The Hill
US effort to negotiate with N. Korea runs into new challenges: CNN
New phase of Brexit crisis for UK after key gov’t members quit: Bloomberg
UK woman dies after poisoning from Soviet-era nerve agent: Reuters
Energy and tech expected to lead for Q2 earnings growth: CNBC
Here’s how the trade war could get ugly: Bloomberg
5 key numbers to consider in the upbeat jobs report for June: CNBC
US trade deficit narrows to 19-month low in May: MarketWatch

● The Bogleheads’ Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk
By Taylor Larimore
Review via Morningstar
Three colors: red, white, and blue. Three funds: Vanguard Total Stock Market Index (VTSAX), Vanguard Total International Stock Index (VTIAX), and Vanguard Total Bond Market Index (VBTLX). According to author Taylor Larimore, those are all that an American investor needs.
All right, he doesn’t actually mention the U.S. flag. That was my addition, this being a July 4 column. However, Taylor’s new book, “The Bogleheads’ Guide to the Three-Fund Portfolio,” is less topical. It is intended to apply not only to each day of the year, but for many years to come. In that task, it succeeds. The publication is as timeless as anything that advocates specific funds can be.
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US companies expanded payrolls by 202,000 in June, the Labor Department reported today. The solid gain marks the second time in as many months that employment grew by more than 200,000.
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The yield spread for 10-year less 2-year Treasuries dipped to 29 basis points on Thursday (July 5), the lowest since August 2007. Will the Federal Reserve tempt economic fate with another rate hike that could push the 10-2-year spread into negative terrain, which would widely be interpreted as a warning that a new recession is near?
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US-China trade war heats up: Reuters
Trump scheduled to meet Russia’s Putin later this month: NY Times
US job cuts up 18% in June vs. May: CG&C
US Services PMI: growth remained strong in June: IHS Markit
US Non-Mfg Index: growth accelerated in June: WSJ
FOMC minutes: Fed eyes recession risk but is upbeat on US economy: Reuters
German industrial output rebounded sharply in May: FT
ADP: US private payrolls increased by moderate 177,000 in June: MW

Consumer discretionary stocks continue to lead US equity sectors for year-to-date performances, based on a set of exchange-traded funds through July 3. The former leader, technology, is in second place and has fallen further behind consumer discretionary in recent weeks.
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US vows to keep Persian Gulf open after Iran’s threats: AP
China says US ‘opening fire’ on world with tariff threats: Reuters
Trump issued new demand for world’s oil producers to stabilize markets: CNN
Police investigating new cases of nerve poisoning in UK: CNN
Employment growth continues to be overshadowed by wage stagnation: OECD
Factory orders in Germany rebounded in May, ending run of declines: Bloomberg
Eurozone economic activity picked up in June: IHS Markit
Factory orders in US rebounded in May after tumbling in April: Zacks
US auto sales increased in June for top carmakers: Reuters
Merger announcements rise to a record $2.5 trillion in first half of 2018: NY Times