Durable goods out this morning showed a sharp decline that was more than expected, but the more important news is non-defense capital goods excluding aircraft, which is a purer read on business investment. That number has been up or flat each month in 2017, a very encouraging sign for the economy when businesses make these kinds of investments.
The market has also paid close attention to Janet Yellen’s comments, and she’s said nothing to roil the them. Her comments may have cost her a shot at another term at the Federal Reserve, however. She expressed strong support for actions taken in the wake of the financial meltdown, rejecting the potential of the Trump administration rolling them back.
She claims these “safeguards” have helped to avoid another crisis, but I think they’ve done more to stop the innate economic growth America would have enjoyed otherwise. The good news is Yellen learned a valuable lesson from that poorly timed rate hike in December 2015 that sent markets cratering in early 2016.
Consumer staples took it on the chin yesterday with their worst session of the year. A combination of disappointment from earnings to the looming entry of Amazon to the wider world of groceries (big price changes at Wholefoods on Monday). I think in this season of sell first, ask questions later, the reactions were overdone; but, unlike other niches in the market that have endured a difficult August, I’m not anxious to sift through the debris for bargains.
On the other hand, I love the consumer discretionary space and see it being an outperformer for the rest of the year. We have a 2 weighting on our Portfolio Approach model portfolio, and we might increase that – for details speak to your representative or contact firstname.lastname@example.org.
Have a great weekend.
|Thanks Charles. Hope you come back to FBN soon. They're being ridiculous|
Jo McInerney on 8/25/2017 11:53:32 PM
|Miss you on "Making Money", tell those people that it is a financial show, not a political one.|
James F Taddei on 8/26/2017 10:52:45 AM
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