The S&P 500 bounced back in July 2010 with its best month of the calendar year by gaining +7.0% (total return).  The strong result snaps a 2-month slump for the stock index (both May and June were losing months) and leaves the S&P 500 down just 0.1% YTD as of last Friday (7/30/10), 7 months and 30 weeks into the current year.  The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).    
 
Deflation has been on the mind of St. Louis Fed President James Bullard.  Comments from Bullard in a published paper last week warned that the US is "closer to a Japanese-style outcome today than at any time in recent history" (i.e., deflation, defined as a wide-ranging fall in the prices of goods and services, as well as the incomes of Americans).  Bullard, a voting member of the Federal Open Market Committee in 2010, is considered to be one of the more "hawkish" Fed members, i.e., a policymaker who is more likely to attack potential inflation early with rate increases (source: Federal Reserve).    
 
Congress will be in session just 1 more week this summer before beginning, as the House describes on its website, a 5-week "Summer District Work Period."  In a survey taken early last month, only 11% of Americans expressed confidence in the legislative work currently being done by Congress, setting the stage for spirited dialogue between House and Senate members and their constituents in the coming weeks (source: Gallup).