Good Morning. Finally, a little bit of economic data today. That’s the good news. The bad news is now post FOMC minutes which once again gave investors “hope” is that news is now going to be filtered through the QE lens.
Good is good and bad is really good. Really bad is like the best thing you can hope for. That is the type of rational analytics involved in the decision as to where trillions in capital is allocated. That was written with sarcasm but it is far from funny because it’s the sad reality of how the capital markets work in a central bank managed free market.
So from a macro standpoint, just eight weeks ago the Fed was concerned about the rate of economic deterioration but in their desire to manage expectations they too expressed “hope” that the second half would show improvement. And the data has somewhat confirmed their hope though one could easily argue the quality of the improvement. For example when the gains in July retail sales offset the losses of June is there really any growth?