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The Cake Remains Unbaked

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Friday, August 30, 2013

This is Mark Vickery covering for Sheraz Mian today.

Late August is like Ramadan for investors -- nothing to chew on for weeks. But things are about to change as the calendar advances toward September, and not only in that I'll be stuck in traffic behind your trailer-hitched boat and Jet-Skis this weekend. Jobs and consumer spending will be key to understanding how the economy can be expected to perform in the back-third of the year, especially when holiday season comes back around.

Personal Income & Spending numbers were flat this morning -- +0.1% in both personal income and spending for July, so we're looking a little harder in the rearview mirror here. But it's hard to avoid that both are flat, which stays consistent with previous months, and this reflects not much of a boost to the overall economy.

Again, consider this is relative ancient history; August jobs numbers, for instance, are up, and plenty of companies have guided toward increased spending in our still-current month. Next week's jobs numbers -- the ADP private sector report on Wednesday and especially the Bureau of Labor Statistics (BLS) non-farm payroll report on Friday -- will be much more instrumental in understanding where we are now, as opposed to how we were in the middle of the summer.

What does this mean for the markets today? Hard to say, but I wouldn't expect anything to really catch fire based on this morning's data. And considering the ongoing saga in Syria and a possible (probable) Congressional cat-fight over the debt ceiling (again) this fall -- to say nothing of what may transpire from the September Fed meeting regarding QE tapering (succinctly: expect some) -- I think we're still looking at an unbaked cake.

After all, it's still August. I know lots of successful people like to get ahead when they can, but honestly -- what is there to move on right now?

Mark Vickery
Senior Editor

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