Posted by Jack
More people are depending on the government to bail them out! The economy is again showing signs of weakening with a slightly lower than expected GDP report, however exports offset slumping home sales and inventories. Wall Street had expected the GDP to grow greater than the 1.9% reported today and that set the market mood. The DOW has been in reversal for the last two days bringing an end to brief financial stock rally. The DOW is hovering just above 6 month lows at 11267…down over 80 points at the time of this report. Meanwhile new jobless claims hit a 5 year high at 448,000 and an overall total of 3.282 million Americans now out of work.
Rising oil and food prices have caused most Americans to cut back on discretionary spending, especially on big ticket items like cars and that is expected to be felt more severely in Q3 report. (See GM story below) Speaking of energy…all the drilling bills have stalled in Congress and any further action is unlikely until the summer break is over. Energy related bills will have to wait until Congress comes back from their August vacation.