Buen’ Dia’ Aug 4, GDP it is now up to the Consumer
It seems as if predicting the markets daily direction lately is as simple as looking at the dollar. It’s up today, so that usually means Europe, oil, gold, and futures are down and as I survey the landscape that’s exactly what I see. I am not a day trader but based on what I have outlined here and in my previous updates a day trader should be having an easy time of it lately. With the earnings season winding down and the euphoria of the second quarter GDP now in the past the market will be looking for new direction. For an in depth look at how the previous quarters changes that were made affected the recent quarter see yesterdays blog [more].
Today lets look at what has to happen to maintain the positive outlook in the GDP. It is really rather simple. The consumer makes up 70% of the number, the govt., about 20%. The Govt. share has expanded at an unsustainable rate and cannot continue. The consumer will have to step up here and I am not sure how this can happen. Cash for clunkers will go away, DR Hortons dollars of new houses built is down over 30%, The unemployment rate continues to grow. The Economy is quite fragile and counting on the Consumer and frankly I’m not sure he is up to the task.