We’re up for the month!
That’s right, things have seemed really crappy but actually they are “eh” because we began the month on a low note at S&P (/ES) 3,765 and now we are at 3,805 so – Yay! Of course, we’ll feel better if we can get back over 3,840 so the weekly chart isn’t a disaster and the Dollar is finally taking a pause – back at 108.3, so there’s the 2% recovery we’ve had in the indexes since yesterday.
The Dollar has a very direct, short-term effect on the indexes but, once it settles down (not lately), THEN you can see what’s actually going on. Earnings data is just starting to come in and we’ll be focused on the Retailers as Consumer Spending is 2/3 of the Economy – so are we in trouble or aren’t we?
8:30 Update: June Retail Sales are up 1% over May, which was down 0.1% from April and, for the year, we’re at a +8.4% pace – that’s not very recessionary, is it? Ex Auto and Gas, we’re up 1% vs 0.5% expected by the Leading Economorons who scream doom and gloom non-stop in the financial media.
Of course, we need to keep in mind that Consumer Prices were up 9.1% so if Retail Sales are up 8.4% it means people are actually buying 0.7% less stuff and just paying more money for it. How many businesses do you know that will suffer from selling less items for more money? Not many.
In fact, the Empire State Manufacturing Index is also an embarrassment to Economorons (I’m just kidding, they seem incapable of being embarrassed, no matter how wrong they are), coming in at +11.1 vs -2 that was predicted. The best part of that report is shipments rose 25.3, from 4 prior – so it seems like bottlenecks are easing – at least on the East Coast.
CitiGroup knocked it out of the park on earnings this morning – that’s helpful but JPM, MS, BLK, BNY, UBS and WFC all missed this week as Banks generally upped their loan-loss provisions. DAL and ERIC also missed but PEP, FAST, WAFD, CAG, FRC, TSM, PGR, STT and UNH all beat so, as I’ve said a lot recently, it’s a stock-picker’s market.
Next week we get a lot of housing data and that’s likely to be depressing but it should be as housing is one of the things the Fed is TRYING to cool off. We’ll see if the Philly Fed agrees with the NY Fed and we get PMI on Friday but not much data otherwise so it will be all about the earnings next week.
Have a great weekend,
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- Phil
