Dow declined 51, advancers & decliners are about equal & NAZ dropped 15. NYSE volume remains quiet, just over 1B, as is typical on a summer Friday. Oil rose 1 to 125 on worries about an Israel - Iran conflict. AAA reported gas at the pump yesterday averaged 3.89 down about 20¢ from the high reached a couple of weeks ago. Car industry gloom spreads around the world. GM, BMW, Nissan, Toyota, etc. have been warning about problems going forward in their businesses. After reporting decent but not great earnings, oil stocks sold off. The Alerian MLP index dropped 1 to 270 remaining stuck under the 275 resistance level. REITs did OK today although First Industrial Realty Trust (FR), in my right column, dropped on an analyst downgrade. Junk bond funds continue offering 12% yields.
Macro economic issues are taking front stage. Analysts are talking about whether we are in a recession or drifting slightly above that level. The GDP & job numbers put them largely in the grim camp. The export sector is driving the economy aided by the weak dollar (making our products cheaper overseas). That had a slower growth rate in Q2, not good. Meanwhile stores are beginning their back to school season, very important. Since most tax rebate checks have been spent, they will have to rely on old fashioned marketing to boost sales. July sale numbers are due shortly, they should give a hint about their outlook in coming months.
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