Economic data continued to fluctuate during the second quarter, and that was generally favorable for equities. Inflation softened as energy prices declined, wage growth remained weak, and on-line price discounting spread. GDP growth remains relatively steady, but below potential. The economy needs a degree of inflation to help create growth, since it acts like grease to accelerate spending. At the same time, with inflation below the Federal Reserve Board’s 2.0% target, interest rate hikes are more likely to be measured and modest, which should support the economy. The potential for economic improvement has kept the stock market moving higher.