This will be a week full of economic and earnings information. We will get the first report on GDP for the second quarter, then earnings from some of biggest tech companies and the Fed will be raising interest rates this week.
For all the potential bad economic news, you have to be impressed that, so far in July, the S&P 500 stock-index has risen 5%.
So much for a bear market some would say.
In fact, there are many who contend we have seen the worst and it is all behind us.
Even now, some try to debate what a recession actually means.
The old definition is two straight quarters of negative GDP.
Many think that the first quarter was just an adjustment to take care of inventories as the country came out of the pandemic.
Others also are saying that though the second quarter may have little or no growth it will not be negative.
The thought being that you throw out the first quarter and the second is poor but not bad. Much of this argument is pushed by Janet Yellen the chief economic advisor for the President and past Fed chairman.
It is a discussion of convenience to me.
What I do see is that inflation is having an impact on the general public.
Some would say consumer spending continues to be strong. The problem with that logic is that we continue to spend but we get far less for our dollar.
Moreover, wages are not keeping up with inflation and you are starting to see more calls for strikes as workers are getting left behind economically.
A rise in interest rates this week will not make people feel better.
It has to hurt home sales and politicians are complaining that the medicine is worse than the disease.
What would you expect from someone that contributes nothing production wise and lives off your tax dollars.
It is always someone else who is at fault in their eyes.
Of real significance this week will be the earnings coming from Amazon, Apple and Microsoft.
These big tech names could give some relief to concerned investors after the poor report and projections from Snap last week.
It is always about the earnings and these companies are significant factors in our economy.
It is amazing how desperate analysts have become to paint a positive picture on a poor economy.
It literally has become a trend to take bad news and stipulate that it wasn’t as bad as it could have been, so that is good news.
What I think the real debate should be is to what extent the slowing economy is going to impact middle America.
It is the benefit of the majority of us that tips the balance.
It seems that some of the worst is behind us as we see commodity prices dropping.
It does not mean growth, as rising interest rates will have an impact.
Not being a fan of the Fed, I feel a little more than pessimistic about the next several months.
That does not make me think that we may have one last push down in the stock market before starting to build our way back.
So that is the essence of the current debate.
