A Disaster Waiting To Happen: Retail Sales (Ex Autos) Still Weak, The Reflation Trade Rolls Over, Rental Units Collapse, Consumers Run Out of Spending Money…
Multi-Family Starts plunged to the lowest levels since September 2016…
A CORRECTION IS ALREADY UNDER WAY
- The headline U.S. stock market remains within striking distance of new all-time highs.
- Yet a correction is already underway under the market surface.
- Stocks currently have a “big” problem.
Many investors have been contemplating the potential for a U.S. stock market correction starting some time over the next couple of months after what has been a remarkable year to date. Whether such a pullback on the headline benchmarks actually comes to pass remains to be seen. But in many respects, a correction in U.S. stocks has already been underway for nearly a month now.
But before anyone gets too enthusiastic about the buying spree, it’s becoming increasingly clear that consumers are running out of steam to carry the load of U.S. economic growth.
On Tuesday, the Commerce Department reported that U.S. consumers boosted their July retail spending by the most this year. Analysts cheered, with some seeing less chance of a recession. Yet after a closer look, it appears that consumers are straining their finances to buy more makeup, baseball bats, couches and home-improvement supplies.
For one, they’re packing on more debt. Households increased their borrowing over the past year at the fastest pace of the economic expansion, according to data published Tuesday by the Federal Reserve Bank of New York. They now have the greatest amount of debt on record, at $12.8 trillion, a $552 billion increase from a year ago.
Brazil’s government set a new primary deficit target for this year and next of 159 billion reais ($49.7 billion), up from 139 billion reais this year and 129 billion ..
PIMCO Alerts Investors on Stocks, Says “Change Is Coming”Following June’s huge surprise jumps in Housing Starts (revised lower) and Building Permits (revised notably higher), July saw both starts and permits plunge (-4.8% and -4.1% respectively) dramatically missing expectations. The majority of the plunge is driven by multi-family starts crashing 35.2% YoY to its lowest since Sept 2016.American consumers are spending more money on goods. That’s making people on Wall Street happy because such purchases account for about 70 percent of the U.S. economy.Permits’ 7.4% June surge was revised up to a 9.2% spike (the biggest since Nov 2015) before July’s plunge.