Despite positive economic data stocks struggle into the final hour with modest losses. For the week the Standard and Poors 500 Index is up 18 points or .64% while the NASDAQ has lost 65 points or .83%.
Preliminary 2nd quarter GDP or Gross Domestic Product matched expectations with an impressive 4.1% gain, the best quarterly showing since early 2014. Absent a tax cut push income growth slowed dramatically from 4.4% in the 1st quarter to 2.6% in the 2nd quarter. Annual revisions to GDP calculations left the growth trend from 2012 through 2017 unchanged at an anemic 2.2%.
Despite the very solid headline economic growth data the economy faces a number of headwinds. The trade war will start to bite with the economic data to be released next month. Housing is clearly wobbling with a number negative sales and price trends having formed of late compliments of higher interest rates. Consumer credit data is also turning south as overindebted consumers experience higher delinquency rates on credit cards, they reached a new record high, and auto loans. After non-housing consumer debt hit a record high percentage of disposable income over 26% late last year.
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