Well, is the economy slowing down or not? Depends on who you ask.
Relieved investors sent stocks soaring Tuesday, with the Dow Jones industrials climbing more than 130 points after the Labor Department reported an unexpected drop in core wholesale prices that renewed confidence in the Federal Reserve’s stance on interest rates and inflation.
Then again, there are others that disagree.
Many were looking for a sign from Fed Chairman Ben Bernanke.
With little to guide them in slow summer trading, investors dwelled on the week’s sluggish housing and durable goods data. Traders had hoped Bernanke might sound a more dovish tone after another Fed official said interest rate hikes might still be in store this year.
That concerns some.
Many investors believe recent data suggests the Fed might have gone too far by raising rates 17 straight times in two years. If the economy moderates too quickly, that could erode corporate profit and consumer spending.
But, this is beautiful. If you think the economic climate is the result of cold, hard economic data, think again. It may have more to do with Mickey Mouse.
Analysts said investors were waiting to see if stocks could latch on to a direction next week, when a batch of economic data including consumer confidence, job growth and manufacturing readings will be released. Many on Wall Street won’t get back from vacation until after Labor Day, and could begin to digest and trade on these numbers then.
'Til they get back from vacation. Lovely.
And you thought economics was boring...
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