THIS WEEK'S UPDATE
Last week marked a noteworthy milestone in our economy: On Wednesday, August 22, the bull market entered its 3,453rd day, the longest such run in U.S. history. In the past 9 plus years, domestic indexes have come quite a way since the dark days of the financial crisis.
This domestic growth occurred against a backdrop of geopolitical events. Investors considered new tariffs between China and the U.S., as well as legal developments potentially related to President Trump. However, economic updates seemed to hold the most sway over market performance last week.
What did we learn about the economy last week?
Beyond passing a major milestone in the bull market, we also received some key economic updates, including:
• The Fed’s interest rate increases should continue at a gradual pace.
In talks last week, Fed Chairman Jerome Powell called the economy “strong” and said inflation isn’t overheating. He indicated the central bank intends to maintain its current pace of interest-rate raises. Markets increased after his remarks.
• The labor market remains strong.
New claims for unemployment fell for the 3rd week in a row and were below expectations, continuing on July’s trend that included the lowest numbers since 1969. This data indicates that, despite U.S. companies facing ongoing trade tension, the labor market remains on solid ground.
• Business investment may be on the rise.
Data for durable goods orders includes details that can hint at how businesses plan to approach spending. This so-called “non-defense capital goods excluding aircraft” grew far more than anticipated in July. The reports indicate that business investments started the 3rd quarter on solid ground.
These updates may help support economists’ perspectives that the bull market still has life left. If you have questions about where your financial life stands today and in the future, we’re here to talk.
Tuesday: Consumer Confidence
Thursday: Personal Income and Outlays, Jobless Claims
Friday: Consumer Sentiment
This day in history:
Red Scare dominates American politics. As the presidential election of 1952 begins to heat up, so do accusations and counteraccusations concerning communism in America. The “Red Scare”—the widespread belief that international communism was operating in the United States—came to dominate much of the debate between Democrats and Republicans in 1952.
On August 27, 1952, the New York Times front page contained three stories suggesting the impact of the Red Scare on the upcoming election. In the first story, the Republican-dominated Senate Internal Security Subcommittee released a report charging that the Radio Writers Guild was dominated by a small number of communists.
Sound familiar? I believe it was Mark Twain said something to the effect that history may not repeat itself exactly, but it rhymes…
Quote of the week:
“Many people take no care of their money till they come nearly to the end of it,
and others do just the same with their time.”
— Johann Wolfgang von Goethe
PUBLISHED BY NICK TOADVINE