The S&P 500 gained nearly 2% in July and has gained about 1% for the year as of August 10 as economic data remain mixed and energy has weighed on earnings.
I had been expecting a bit bigger recovery in GDP, so the 2.3% reading for the second quarter was mildly disappointing.
Auto sales remain strong, probably because of an improving labor market and the low price of gas.
One benefit of the drop in oil prices is the boost it gives to consumers–and consumer spending represents something on the order of 68% of GDP.
However confidence numbers were weak and wage growth is virtually nil.
If US Federal Reserve Chair Janet Yellen is “data dependent,” she continues to have ammunition on both sides of the equation to raise (or not) the targeted Fed Funds rate.
My own opinion is that I’d like to see a step before year end, but I don’t expect a series of hikes.
Regardless, in this trendless and choppy market, I think good stock picking will be an advantage.
Peattie Capital believes that paying the right prices to own the right stocks is a good approach to the market.