Minutes of Last Federal Reserve Meeting Show Dovish and Hawkish Tones… The minutes suggested that the central bankers stand ready to raise rates again but are cognizant that their previous efforts might slow the economy.
What it means— If you’re wondering how that’s different from anything the bankers have said over the last three weeks, it’s not. But it does accentuate every economic report. To wit, when the Atlanta Fed’s GDPNow model climbed above 4% for third-quarter growth earlier this week, investors began to worry about another hike. Now that the GDPNow model sits at 5.8%, investors are jogging but not quite running to the exits. These are only the July economic numbers. We have two more months of statistical reports to eat through this quarter, but the Fed meets in 25 days. If the numbers remain strong, expect higher short rates and higher long rates, which doesn’t bode well for stocks or bonds.
July Retail Sales Jump 0.7%, Well Above the 0.4% Forecast… Sales for online shopping, food services, and drinking places expanded, while auto sales eased.
What it means— The Amazon Prime Day in July could have boosted online sales, but the numbers were pretty good, aside from autos and gasoline (remember, this was about July). These numbers aren’t adjusted for inflation, but even with that, retail sales increased by 0.5%. Auto sales fell 0.3%, although they’re still up 7.6% over last year. Watch food services and drinking places closely to see if consumers are still getting out and about. So far, higher prices might be annoying, but they’re not stopping people from getting together, sharing a meal, and tossing a few back. This is good for businesses but won’t help the Fed reach its 2% inflation goal.
July Housing Starts Up 3.9% in July After June Starts Were Revised Down From -8% to -11.7%… Housing starts reached an annualized rate of 1.45 million, well off the 1.8 million top in April 2022.
What it means— It was a tale of two reports. While housing starts bounced back a bit and stand just under 1.5 million units per year, builders are worried. They reported strong demand, but also discounted homes around 6% to clear some inventory. Investors worried about the Fed raising rates are pushing long-term interest rates higher, which weighs on homebuyers, especially first-time homebuyers. This is probably why all the growth in housing starts last month came from multi-family units, not single-family units.
Houston Woman Crawls Through Roach-Infested Sewer To Rescue Puppies… A week ago, someone posted about lost puppies on Callie Clemens’ Facebook page. Clemens, the daughter-in-law of the NY Yankees’ Roger Clemens, is founder of the nonprofit Paws Off the Streets, which is dedicated to helping animals. The pups were loose in the neighborhood, but by the time Clemens arrived, they had fallen into a storm drain. Clemens knew what to do, because she had done the same thing for kittens: she crawled into the sewer after them. She spent several days in the sewer in 100°F-plus heat, doing her best to dodge roaches as she searched for the pups. She rescued two of them.
Data supplied by HS Dent Research
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