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By Kristin Myers, Editor-in-Chief

What's Happening Today

Yesterday one key inflation metric, the Consumer Price Index (CPI), showed that inflation was cooling. Today, another important inflation gauge, the Producer Price Index (PPI), confirmed that yesterday's report wasn't a fluke: Inflation is indeed cooling. What's the difference? The CPI shows how much more you and I will pay for goods in stores, while the PPI is a measure of inflation at the wholesale level. The PPI is also considered a "leading economic indicator," as producers often adjust prices consumers like us pay when their costs rise.

In July, the PPI fell 0.5% from the month prior. That's better than the 0.2% increase economists were expecting. But as you can probably guess, inflation still remains very high: The PPI is up 9.8% since last year, although that rate is lower than June's 11.3%. The drop in PPI is largely attributed to falling energy prices—but even when energy, food, and trade services are excluded, the PPI increased 0.2% last month, cooling from 0.3% in June.

Investors are responding enthusiastically to the news, sending stocks into a rally heading into the weekend. The pop in markets has chased the bear away, at least for the Nasdaq. After a blowout jobs report and the signs that inflation is finally starting to cool down, a broad-based rally lifted the Nasdaq out of a bear market, ushering in a bull market.

- Kristin

Editors' Picks

U.S. Gas Prices Fall Below $4 a Gallon, AAA Says (The New York Times)

Stock Market Dictionary: Your Guide to the Jargon (The Balance)

Best Stocks and Sectors for Rising Interest Rates (The Balance)

Mortgage Rates Bounce Back on Strong Employment and Inflation Data (The Washington Post)

How Much House Can You Afford? (The Balance)

The Snowballing US Rental Crisis Is Sparing Nowhere and No One (Bloomberg)

Can't Pay Rent? Here's Where To Find Help (The Balance)

Term of the Day

Bull Market

A bull market is the market condition when prices continue to rise. Markets follow two general trends over time. Either prices are in an upswing (increase) or they are in a downswing (decrease).

If prices fall 10% or less, it is considered to be a market correction. At 20%, the bull market is mourned by investors as the bear market begins. The same percentages are used when prices begin to rise to announce the return of a bull market.

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Off the Charts

Whether bonds or stocks are a better investment for you can depend on a number of things. First, what are your personal goals? If you want to avoid losing your principal, enjoy receiving regular payments, and aren't concerned about inflation, then bonds might be right for you. They might also be preferable for you if you are retired or otherwise in need of using the investment income. But if you can hold on to stocks even if the value drops, you don't need income, and you want to outpace inflation, then stocks might offer more benefits.