The major averages enter the final hour with large gains despite disappointing news. Since Monday the Standard and Poors 500 Index is up 21 points or .7% while the NASDAQ has gained 111 points or 1.4%.
Durable Goods orders missed consensus in July, falling almost twice expectations with a 1.7% decline. The proxy for business spending non-defense capital goods ex aircraft marked a 4th consecutive advance with a 1.4% gain. A volatile series July makes a 3rd decline in the last 4-months.
Trade talks have broken down with the Chinese, with no new talks scheduled. This marks a 3rd failed trade discussion aimed at averting a protracted trade war and puts the November trade summit in real doubt. With neither side willing to compromise it would seem that a significant expansion of tit-for-tat tariffs is all but assured with an additional 200 billion in trade set to be subject to tariffs in the next few months. With scandal engulfing Trump and the mid -term elections scheduled for November it would seem that the Chinese are adopting a wait and see attitude figuring the Republicans will have to back down, particularly if the election goes badly as many expect.
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