Featured News

More Articles  Printer Friendly Version

 

Stocks Closed 1% Off All-Time High; Strong New Economic Data

4944 2

The Standard Poor's 500 stock index, the main growth driver of investor portfolios, closed the week less than 1% off Monday's all-time closing high, and the U.S. Index Of Leading Economic Indicators surged again in July. Meanwhile, the latest fundamentals, retail sales and housing starts data, remained very strong in July. Here's a two-minute update for investors.

4944 3

This chart shows that the LEI has rolled over very definitively prior to recession – except for the Covid-19 recession, making it a reliable indicator of what’s ahead in the economy. The LEI’s surge since the Covid recovery began indicates no recession is in the outlook.

The Conference Board, an association for large U.S. companies, has measured the U.S. Leading Economic Indicators monthly since 1996 and the index is higher than since its inception.

“The U.S. LEI registered another large gain in July, with all components contributing positively. The Leading Index’s overall upward trend, which started with the end of the pandemic-induced recession in April 2020, is consistent with strong economic growth in the second half of the year,” according to the Conference Board’s economics research team. “While the Delta variant and/or rising inflation fears could create headwinds for the US economy in the near term, we expect real GDP growth for 2021 to reach 6% year-over-year, before easing to a still robust 4% growth rate for 2022.”

The Conference Board Leading Economic Index® (LEI), is comprised of the following component indexes measuring fundamentals key to growth in the U.S:

  1. average weekly hours worked in manufacturing sector
  2. average weekly initial unemployment claims
  3. manufacturers’ new orders of consumer goods and materials
  4. ISM index of new orders
  5. manufacturers’ new orders, nondefense capital goods
  6. building permits for new private single-family housing units
  7. stock prices as measured by the S&P 500
  8. Leading Credit Index™
  9. interest rate spread between 10-year Treasury minus fed funds
  10. index of consumer expectations

4944 4

The Census Bureau’s monthly retail sales report is comprised mostly – 88% -- of sales of goods while just 12% of retail sales comes from the service sector. Retail sales overall contribute 30% of U.S. economic growth.

In July, retail sales ticked lower and some commentators say it’s a bad sign. However, retail sales are coming off a spectacular Covid recovery surge that had propelled retail sales to heights no one had expected. The 1.1% decline in retail sales that occurred from June to July was not so important in the context of the 15.6% surge in retail sales in the 12 months ended July 2021.

July retail sales excluding gasoline prices because of their volatility, are up +14.1% y/y compared to June’s +17.0% y/y.

4944 5

In July, the U.S. government recorded 1.53 million housing starts, compared to 1.64 million in June. That’s down from a month ago but is still near a 15-year high. The U.S. needs about 1.7 million new single-family homes built every year and had been trailing that figure for 15 years until just before the pandemic. After plunging during the initial Covid outbreak, it has staged a comeback to its pre-Covid strength.

4944 6

The Standard & Poor’s 500 stock index closed today at 4,441.67. The index gained +0.81% from Thursday and is down -0.59% from last week. The index is up +66% from the March 23, 2020, bear market low.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.< This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.


Email this article to a friend


Index
Should You Care About Wall Street Stock Market Predictions?
Weekly Economic Update For Investors
Despite Pandemic, Stocks Closed 2021 With A 26.9% Return
Tracking The Economic Boom
Fed Changes Its Inflation Stance
Despite Inflation And Omicron, A Booming Economy
The Week's Financial News: Crosscurrents In The Economy
After Breaking Records For Six Weeks, Stocks Dropped -2.3% Friday
Already Higher Than Ever, Leading Economic Index Surged Again In October
Five Observations For Investment Planning For The Decades Ahead
Financial Economic Outlook
S&P 500 Closed Friday At Record High Again On Strong Earnings Reports
With Economic Recovery Intact, Stocks Are Near Record Again
Are The Five Stocks Driving The Market's Great Returns Overvalued?
Despite Gloomy Jobs Report, The Economic Outlook Remains Bright
S&P 500 Rebounded Today After A Difficult Week And Month

This article was written by a professional financial journalist for Blattel & Associates and is not intended as legal or investment advice.

©2022 Advisor Products Inc. All Rights Reserved.

The articles and opinions on this site are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your advisor with regard to your individual situation.
All summaries/prices/quotes/statistics presented here have been obtained from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness. Past performance is no guarantee of future results.
When you access certain links on the Blattel & Associates website you may leave this website. We do not endorse the content of such websites nor the products, services or other items offered through such websites. Any links to other sites are not intended as referrals or endorsements, but are merely provided to the users of the Blattel & Associates website for convenience and informational purposes.
Robert Blattel is a CERTIFIED FINANCIAL PLANNERTM practitioner. The partners of Blattel & Associates are not registered in all states. Please contact us to verify availability in your state. This is not an offer to buy or sell any security.
CFP® and CERTIFIED FINANCIAL PLANNERTM are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.
Securities and Investment Advisory Services offered through Cutter & Company Brokerage, Inc., 15415 Clayton Road, Ballwin, Missouri 63011 * (636) 537-8770. Member FINRA/SIPC.
Privacy Policy can be read at http://www.cutterco.com/privacypolicy.htm.