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Economic Highlights

There's truly nothing like drawing the short straw -- charged with writing Ahead of Wall Street with nearly all of Q2 earnings season in the rear view and Q3 still six weeks away, low volume as much of the civilized world remains on vacation, and somehow trying to figure out exactly why the S&P 500 has pulled back to 1650, and where it's likely to go from here. And it's not even Shark Week anymore!

It's enough to make one consider discussing the next Fed chairperson or -- God forbid -- the situation in Egypt!

Thank goodness for the retailers -- the last major sector to report this earnings season. After the bell today we'll hear from Urban Outfitter (
(URBN - Analyst Report)), tomorrow is Home Depot ((HD - Analyst Report)) and J.C. Penney ((JCP - Analyst Report)). But if this morning's Saks () miss is any indication, don't expect Retail to rescue the remainder of Q2 earnings season.

In fact, aside from the occasional anomaly like Tesla (
(TSLA - Analyst Report)) and Facebook ((FB - Analyst Report)), the main successes of this earnings season all occurred on the front end, when the Financials reported. Total earnings growth is actually down 3% -- weaker than Q1 -- when you subtract the Financials.

So what we've been seeing is what Sheraz has predicted: that companies' guidance for Q3 and Q4 are coming down. But a glance at the charts from his Earnings Preview on Friday shows that projected earnings growth for Q4 is still very high; even subtracting the Financials, we're still "expecting" 8.4% growth for that period. Needless to say, based on our most recent quarterly results, 8.4% looks like pie-in-the-sky at this point.

That said, by nearly all accounts we've reached the nadir of economic growth that had been predicted earlier this year with hurdles like the Sequester and payroll tax increase. Add to this the expected QE Tapering and it should baffle nobody that the overall market has been taking a breather lately.

Plus, that situation in Egypt is tragic and may yet have consequences for the global market; we've already seen oil prices rise as a result. See there? I was forced to discuss it anyway.

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