On Monday, the National Association of Home Builders released its August Housing Market Index. Due to strength in the new home market and future expectations, the Housing Market Index rose from July’s 60 points to August’s 61 points. Lack of supply and prevalence in demand has home builders, like Clinton fans, more excited than they’ve been in nine years.
On Wednesday, the Department of Labor released its July Consumer Price Index (CPI), which showed both the CPI and Core-CPI (CPI less food and energy) stole Heidi Klum’s 0.1 point loss as both were up 0.1 percent. Gasoline spiked like a pass to the forehead from Marco Rubio with a 0.9 percent increase in July. Future expectations are that gas prices will drop precipitously in August. Apparel and rent both saw increases of 0.3 percent, with all other components (vehicles to drugs of the RX kind) down. With the year-over-year core-CPI at 1.8 percent, 0.2 percent below the Fed’s elusive 2.0 percent goal post, the ever-pending rate increase won’t happen soon.
If you thought the drop in Ashely Madison data was bad, on Thursday The Conference Board released its July Leading Indicators Index. This index dropped to -0.2 percent from May and June’s positive 0.6 percent. The Leading Indicators Index is an amalgamation of ten, well, leading economic and market indicators. July’s reading suggests an, at best, flat economy about six months from now. A $5 Hillary Secret Server Wiper may clean your hard drive and this economic mess.
Despite headline news, the U.S. economy remains tepid. Housing is up, but a house doesn’t a financial plan make as we learned in 2008. Emerging economies, particularly China, have been taken down more than Page v. Cruz, which was kinda lame to be honest. U.S. trading markets haven’t seen a correction (10 percent drop) in over four years. This has investors on edge and CEOs, as we know, have sold their souls to investors to the detriment of their employees.
What that means for you and me is wages will remain stagnant, the U.S. job market and the investing market will be more down than up into 2016 and inflation and interest rates will remain constrained. Don’t go all Deez Nuts with spending, rather save and invest in the market, as appropriate. While you won’t buy stocks at their ultimate lows, you will benefit from their eventual rises.
The U.S. stock market did see a six percent drop last week. If you’re not retiring within the next five years, hold steady with your current investment plan. Bull market returns are highest just after the end of bear markets. It took a mere three weeks after the DOW hit its bottom in 2009 to gain 20 percent, less than three months for the S&P to gain 30 percent and less than nine months for the S&P to gain 60 percent. If you can’t handle this market volatility, change your investment plan. Talk with a financial advisor, as necessary.
That’s this week’s Money Conscious Mash Up. Hopefully you were slightly entertained and edified. Come back every Sunday for our slightly offbeat take on econo-news, market news and polito-pop culture.