Fear recedes
The US isn't falling off any kind of economic cliff. The latest data on consumers and manufacturing all beat estimates by a healthy margin.
- Philadelphia Fed business outlook for August 16.8 versus 9.5 estimate
- US Empire manufacturing for August 4.8 vs 2.0 estimate
- US July advance retail sales +0.7% vs +0.3% expected
Other risk assets are less cheerful. The problem here is the Fed. Every data point that beats estimates trims the chance of a rate cut. Certainly there are some people at the Fed looking at the best 7-month stretch in core retail sales and asking themselves why they should be cutting rates.
