The Week in Review: August 19, 2024
Economic Anxieties Subside
Markets settled down in Japan, and the latest economic reports in the U.S. aren’t signaling that the economy is headed for an imminent recession.
These factors sparked a strong rally in U.S. stocks last week.
The U.S. Census Bureau reported that retail sales jumped 1.0% in July, led by a 3.6% rise in auto sales.
The surge in car sales can be attributed to a rebound at dealerships that were held back in June by a cyberattack that depressed sales. In June, auto sales slid 3.4%.
While July’s headline is overstating strength, the underlying current is flowing in the right direction.
The graphic below illustrates the monthly change in retail sales (blue bar), and the monthly change in retail sales excluding autos and gas stations (helps filter for changes in gas prices).
Ex-autos and ex-gas stations, the moving average over the last three months is the highest of the year.
Good cheer, however, is not being spread equally.
According to the Wall Street Journal, one large home improvement retailer warned last week that consumer weakness is affecting sales.
Yet the remark, “We have not seen any incremental fraying of consumer health,” came just two days later from the chief financial officer of the world’s largest retailer (Wall Street Journal).
The economy isn’t creating the massive number of jobs we saw a couple of years ago (nor was that sustainable).
And, as the Wall Street Journal pointed out last week, “Suddenly, hourly workers aren’t so hard to find.” But the economy is slowly grinding higher.
Market Summary
Two for the Road
Recently the U.S. national debt surpassed $35 trillion for the first time in the nation’s history. It took 192 years, from 1789 to 1981, to accumulate the first trillion dollars of national debt. - National Review, July 29, 2024
At the end of the second quarter of this year, Warren Buffett’s Berkshire Hathaway held $234.6 billion in short-term Treasury bills which is more bills than the U.S. Federal Reserve owns.- CNBC, August 7, 2024
Please do not hesitate to contact me with any questions or concerns. I hope you have a wonderful week!
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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