Good Morning. Today is the second day of Congressional testimony for Chairman Bernanke, though the same prepared remarks. The only possible news is in regards to questions and subsequent answers. But it is highly unlikely anything different comes out today versus Tuesday’s testimony.
Later in the session the Fed beige book is released and is likely to confirm recent data and Fed speak. That the economy is weakening. At this point the US and global macro environment is becoming all too clear. This “soft patch” is anything but. The summer of 2011 was a soft patch as the inventory build cycle was able to provide a stimulus of sorts. But today with retail sales contracting, inventory is simply at levels beyond what is needed.
Adding to the economic weakness is the reality of a weak earnings season. Yet somehow the mainstream media spins the data as a “beat.” From Intel lowering forecasts to companies “beating” recently lowered guidance this earning season is anything but solid. Instead it shows an economy in transition.
As for the markets they remain challenging and patience is still needed. We enter, in some sense the “moment of truth” today in regards to