Hope you are all doing well. Each of the major U.S. stock indexes set record highs on Monday, but the S&P 500, NASDAQ, and Dow ended the week fractionally lower after posting three consecutive daily declines beginning Tuesday. For the S&P 500, it was just the second negative week out of the past eight. We have not had many pullbacks so if you are waiting for an opportunity to buy stocks we may get one soon. Selena Gomez got married this week, I have broken down this week’s update using Selena Gomez songs.
Everything Is Not As It Seems
Hard to know how strong our economy actually is. That is because the numbers keep getting revised. The U.S. economy expanded in the spring at a faster rate than two previous estimates had shown. Thursday’s update pegged the second quarter’s annual GDP growth at 3.8%, up from estimates of 3.3% and 3.0% released in August and July, respectively. The recent growth marks a sharp turnaround from the first quarter’s slight GDP contraction. The real test will be the back off of the year to see if the economy holds up as tariffs work their way through the economy.
Kill em with kindness
Killing with kindness is not exactly what’s happening in Congress. The U.S. fiscal year is scheduled to end on Wednesday, October 1. Republican leaders in both chambers are holding the line and saying they are not ceding to Democratic demands in order to pass funding for the government. The rhetoric on both sides is heightening the imminent threat of a shutdown. Although Republicans hold majorities in both the House and Senate, they’ll need support from a number of Democratic senators to get a funding extension passed. The political drama will keep markets on edge this week.
Who says
Who says that rising inflation is a bad thing? Markets want the Fed to stay on their current rate cutting path. Inflation doesn’t need to go down but it can’t go up faster than expected. The U.S. Federal Reserve’s preferred inflation gauge extended a recent string of slow-but-steady monthly increases. The Personal Consumption Expenditures Index rose at an annual rate of 2.7% in August. Excluding energy and food prices, the core PCE Index rose 2.9% which is in line with expectations. Inflation and the weakening job market has consumers feeling a little more pessimistic about the future. The monthly indicator that tracks U.S. consumer sentiment fell for the third month in a row. Negative sentiment can impact consumer spending, though the numbers don’t reflect that it has.
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