Stocks continued to make back losses from earlier in the week. Highlighted by a tech resurgence, the Dow finished the week strong with a 306 point gain to close at 25,886. Stocks took about a 1.5% haircut this week while the 10 year treasury yield lost about 10%.
Retail sales were up 0.7% in July. This coupled with inflation moderately on the rise and low consumer debt delinquencies illustrate a solid consumer. Unemployment continues to be low and productivity is growing. At this point, the real threat to the U.S. economy is the slowdown in Europe and the trade war with China. It is likely that the Fed will reduce interest rates again in September and it would be in response to these factors, rather than data collected regarding the U.S. economy.
GE CEO, Larry Culp, doubled down on his defense of their accounting by buying $2 million worth of GE stock yesterday. Other analysts have come to GE’s defense stating that much of the financial errors were done during Immelt’s time and much of the long-term care financial issues have already been written down. The stock rebounded 9% today, and I guess we’ll continue to see what materializes from all of this.