Amid the political conventions of the last weeks, the markets hit records highs but slid back to end the month. Economic news was mixed and political developments didn’t seem to have a material effect.
The Dow was up 2.8% for July after reaching a record 18,622 on July 26. The S&P was up 3.6% for the month. These highs were in contrast to the 20% plunge in oil prices which is seen by some as bearish on the stocks.
Real GDP was up a mere 12.2% for the second quarter which was better than the prior quarter’s .8% but no where near the historical 3.2%. The short fall from expected 2+% was blamed on inventory liquidation and weak oil prices.
Retail sales were healthy but businesses are not spending. Its cheaper for them to hire workers and then firing them when things slow than investing in expensive equipment and then having it sit idle.
Odds slightly favor the Dems retaining the White House, GOP holding onto the House and the Senate is a tossup. Implications for the economy and markets are not favorable but recession is not expected in the nex year. The Fed may hike rates in December but a lot could happen between now and then.
