After opening higher the major averages struggled into the final hour about even on generally positive but not overly significant economic data. Trumps political payments and other scandals seem to have faded into the background for now. Same for Tesla and Elon Musk with the going private fiasco disappearing from the headlines. As once again nothing seems to matter anymore.
Wholesale trade gained .7% in July, it best showing in 5-months, on another big jump in Durable Goods inventories. Retail stockpiles increased .4%, led by Durable Goods. Inventory to sales ratios remain very lean but downside risks remain with respect to trade tariffs.
The trade balance increased to -72.2 billion in July. Exports fell to a 5-month low of 140 billion while imports increased to 212.2 billion. Much of the reduction in exports traces back to the Soybean spat with China and related tariffs. While some companies may benefit from the tariffs, consumer’s face higher prices on a wide range of goods that is growing steadily along with the rhetoric on the subject.
The Richmond Fed regional manufacturing survey gained 4 points in August to 24. New orders and employment advanced, price data slipped a little but remains high. As with trade, tariffs remain a downside risk to manufacturing and the economy in general.
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