This week’s stock market performance was a roller coaster less predictable than Miley Cyrus. I mean, the markets had a circuit breaker way before Miley suffered us with Hanna Montana. After all was said and done, all three major indices, NASDAQ, S&P and the DOW eked out week-to-week gains.
The week’s economic reports made us feel as good as hearing a duet of Smelly Cat with Lisa Kudrow and Miley’s half cousin once removed and suggest fundamental economic strength. Is our nation’s economy finally out of the littler box? Don’t unpinch your nose just yet.
The first report of the week was the Census Bureau’s July New Home Sales Index, which saw an increase of new home sales to 5.4 percent over June with the Northeast leading the way. Year-over-year sales increased 26 percent.This was about as predictable as Paula Deen’s Please Don’t Hate Me Cause I’m Racist Chicken Dance. Housing has been the best and most consistent component of the economy and we’re concerned it may soon mirror Deen’s inevitable dance floor wipeout.
On Tuesday, the Conference Board released its August Consumer Confidence Index, which saw enormous improvements to 101.5 from July’s 91.0. Improvements were driven by a 6.5 percent drop in the present situation component, meaning the number of those who reported jobs as hard to find dropped. The future expectations component also saw improvements with a 10 point increase. The future expectations component still predicts a drop in consumer purchasing, specifically in autos, as predictable as the pious being hypocrites.
Finally, it was reported on Thursday that the Commerce Department’s second reading of second quarter 2015 U.S. Gross Domestic Product was 3.7 percent, up from the initial estimate of 2.3 percent. The data further show consumer spending increased to 3.1 percent from 2.9 percent, despite serious lemonade stand controls in The Hamptons. The One Percent will just have to get its lemonade from a grocery store like the rest of us. Business investment was no lemon, either, with an increase of 3.2 percent. This suggested economic strength preceded the Bureau of Economic Analysis’ July Personal Incomes and Outlays on Friday, which showed personal incomes up 0.4 percent and personal spending up 0.3 percent. How do you like them apples?
While headline economic reports were good, underlying numbers suggest headwinds, as we mentioned in last week’s Money Conscious Mash Up. We’re happy to see personal incomes up. If your income is up, save the increase in liquid investments, such as a savings account or money market fund, rather than spend it. Avoid credit like a French woman with a gadget allery. It was reported that as of June 2015, outstanding credit card debt was at its highest since January 2010. If you’re investing, this week was a prime example of why diversification is important. Maintain proper diversification for the foreseeable future. Don’t let fear or greed rule your investment decisions. While we’re at it, don’t let them rule your voting decisions, either.
That’s this week’s Money Conscious Mash Up. Come back very week for our odd take on all things sleepy.