The US Consumer Is 2/3 Of The US Economy:

They Are Confident, But They Are Not Spending

And this has been one of our new and on-going themes (apologies for the repetition) regarding the current state of the US economy: 

Baby Boomers are saving for retirement, Millennial's just don't (yet) have money to spend.

• US June Retail Sales data declined by .3% (May's data was revised down to plus 1% from plus 1.2%).
• Excluding Auto's and Gas, the decline was .2% (and May's data was revised down from plus .7% to plus .5%).

When the consumer doesn't spend, inventories sit on the shelves (cars sit on the dealer lots) and producers have to cut back on production.

In the meantime, sellers offer incentive discounts to move their excess inventories and this eventually falls to the "bottom line".

The bottom line is earnings and we have also been hitting on another recurring theme that without earnings growth, regardless of how low interest rates may be, stock prices can not go up.

Earnings have not been growing and expectations for future earnings will likely get revised down. 

The basic fundamentals can only be ignored for so long.

The S&P 500 is tired (because there are no new catalysts to take it higher) and buyers are not willing to buy at these (relatively expensive) levels, other than short-term traders covering short positions after the Greek solution.

As the wise market analyst Dennis Gartman often states: 

"It takes buying to make a market go up and just a lack of buying to make it go down".

The US Federal Reserve will give pause to think about this number and it could certainly delay the expected September increase in interest rates.

Tomorrow, the Bank Of Canada will announce its decision on monetary policy and interest rates.

Stay tuned.

And don't forget to check out our weekly webinar, broadcast live at 4:15 every Tuesday and recorded and posted on our website:

http://www.highrockcapital.ca/current-edition-of-the-weekly-webinar.html

Where we discuss wealth management, the global economy,  financial markets and the strategic positioning of our portfolio models.

Today, live from Pointe Au Baril on the north eastern shore of the beautiful Georgian Bay.