It was not a great start for August as the NASDAQ and S7P 500 stock index lost ground.
It was the first weekly loss for the NASDAQ in over a year.
The Dow posted its fourth rise in the last three months. Some of the blame was attributed to inflation news that saw the CPI and PPI rise for the first time in a year.
It should be noted that it was a fractional rise of the smallest order, but it was up.
This also came with continued rising wage pressure and rising energy costs.
The tight labor market will keep pressure on employers with unemployment at just above 3%.
This week, we will get a view of where the consumer stands as Home Depot, Target and Walmart will report.
I for one, when out shopping, see stores full of patrons.
This may be due to the fact that credit card debt has climbed substantially for the general public.
Of course, we have the ever-increasing federal debt.
Last week, the Treasury auction was not strong as the Treasury has to issue more and more debt to cover the spending.
That only leads into September with Congress back in DC and having to deal with the debt ceiling. This comes with calls from the Administration for more spending.
And we thought Modern Monetary theory was dead and gone.
The merger scene is not dead even with all the efforts of the FTC.
US Steel received an offer from Cleveland-Cliffs, which they initially rejected, and are looking at options. Given the poor track record of the FTC, it seems free enterprise will go on, but at the cost of delays due to government intervention.
It does seem though that next month’s Fed meeting should not bring another rate increase no matter the latest small rise in inflation. Mortgage rates are at 7% and creating some pain for home buyers not experienced in over 10 years.
To me, it actually seems like a sweet spot for interest rates.
They are not so high as to completely shut down the economy, but just high enough to slow down foolish spending.
I for one wouldn’t mind a decade at this level, but you have to realize, I don’t do debt.
Easy for me to say.
It seems that the recent turn in the NASDAQ is just profit taking.
I am concerned about the federal debt but you have to expect that market to pull back from time to time after such significant moves up.
That Black Swan is paddling around just out of sight and caution is not a bad ally.
The trend lines for the S&P 500 are still positive.
It just may be a regular August where the market is turbulent, but not to the extreme.
My advice is to enjoy what you can of the last days of summer.
It will all change soon enough with school and football season coming. Heck, in a couple of weeks they will have the Christmas decorations up for you.
