Retail sales for June were down a disappointing -0.5%. This follows a revised -1.1% decline in May and was less than the consensus estimate of -0.1%. There can be no recovery without a robust increase in retail sales but inflation will remain low. Get ready for deflation!
Credit Growth, aka lending remains slow gruelingly slow. Small businesses generate jobs and banks are reluctant to extend credit to these smaller entities which in turn stifles any progress on employment growth, and the spiral continues. This is a continuation of what I like to call the - Slog through the mud economy. We are climbing up the hill through the mud in a rain storm, and it's getting awfully thick.
Get ready for a disappointing GDP figure on July 30th. The government has reduced estimates 3 times already, which is a bad sign. They expect 2.7%. I think it will be more like 2% if we're lucky, which would kill stocks. However that will guarantee deflation which is good for bonds.
Never a more pivotal time
We are at a crucial time in this economy, and my assessment of it is gaining national attention.
Two of my most recent interviews are extremely pertinent. They point to where the economy and markets are right now and what we can expect in the next 30 days and beyond.
Regardless of what the economy does, we are still finding great opportunities out there while also attempting to protect our clients' portfolios. With slow growth and/or a deflationary environment, bonds and high dividend stocks perform very well and there are several attractive high yield issues out there.
About this Author
Keith Springer, President of Capital Financial Advisory Services a SEC Registered Investment Advisory Firm, providing Wealth Management and Mortgage Consulting Services. For more information on how to build and maintain a solid retirement plan, please contact Keith Springer at 916-925-8900 or keith@keithspringer.com, http://www.keithspringer.com.
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