Recap of July 2010 Economic Data...The Folly Continues

Yes America, the folly within the U.S. Equity Market continues. The NASDAQ, S and P 500 and of course the all important 30 Dow Jones Industrial Average inflicted tremendous pain on anyone shorting the market based on fundamental economic data. The bullish algorithmic gamers took the month from the bears (you know, the one's that don't rely on CNBC or comic books for their analysis) and launched the S and P 500 6.88%. Naturally, the trading volume was anemic however the movement afforded another month of paid advertising and busload of Mensa-like portfolio managers on CNBC.

When the CNBC pundits emphatically urge the retail investor to "get in the game" (sounds like Cramer screaming in the background). Research the data released during the month yourself and decide if you want the children's college fund placed in Mr. Market. Hey, what does grandpa know, many "experts" on CNBC deem this to be a generational buying opportunity...you know, if your time horizon is long term (a.k.a. 20+ years). Grandpa wishes you the very best in whatever you decide. The following are "just the facts" reported during the month.

July Economic Data

• Weekly initial jobless claims averaged 457,000 for the month 
• May Pending Home Sales DOWN 30% month over month and down 15.9% year over year
• Domestic vehicle sales for June: 8.4 million annualized units verus consensus of 8.9 million annualized units (May reported at 8.9 million annualized units)
• Construction spending for May -0.2% versus consensus estimates of -0.9% (April revised to +2.3% from +2.7%)
•  Non-farm payrolls for June DOWN 125,000 on a consensus estimate of down 100,000
• Unemployment rate dropped to 9.5% from 9.7% (grandpa opts not to comment...)
•  Factory Orders for May DOWN 1.4% versus consensus estimate of down 0.6% (April month revised to +1.0% from +1.2%)
•  ISM Services for June 53.8 versus consensus of 55 (May was 55.4)
• Consumer credit for May -$9.1 billion versus consensus estimate of -$3.0 billion (April revised to -$14.9 billion versus +$1.0 billion....clearly the Federal Reserve has an issue)
• Trade Balance for May -$42.3 billion versus consensus estimate of -$39.4 billion (April -$40.3 billion)
• Retail Sales June -0.5% versus consensus estimate of -0.2% (May revised to -1.1% versus -1.2%
• NY Fed Empire Manufacturing July 5.08 versus consensus estimate of 18.0 (June 19.57)
• Philadelphia Fed Survey July 5.1 versus consensus estimate of 10.1 (June 8.0)
• National Assoc. of Home Builders July 14..lowest since April 2009 (June revised to 16 from 17)
• Housing Starts June 549,000 versus consensus estimate of 575,000 (May revised down to 578,000 from 593,000)
• Existing Home Sales May 5.37 million versus consensus estimate of 5.09 million (April was 5.66 million)
•  New Home Sales June 330,000 versus consensus estimate of 310,000 (May revised to 267,000 from 300,000....267,000 lowest level on record)
• Consumer Confidence July 50.4 versus consensus estimate of 51 (June  raised to 54.3 from 52.9)
• Durable Orders June -1.0% versus consensus estimate of +1.0% (May reduced to 1.2% from 1.6%)
• Fed's Beige Book...not viewed as encouraging, reflective of Bernanke's earlier reference to the economy being "unusually uncertain"
• Q2 GDP 2.4% versus consensus estimate of 2.5%. Q1 revised to 3.7% from 2.7% while the government revised down GDP figures for 2007, 2008 and 2009
• Chicago PMI  July 62.3 versus consensus estimate of 56.3 (June 59.1)
• University of MI Sentiment final for July 67.8 versus consensus estimate of 67.5 (June final was 76)

Grandpa has set the timer for 2013 given the GDP revisions as will likely be 3 years before the "shrooms" wear off given the 37% increase to Q1 GDP on Friday. It took the government until 2010 to revise down 2007, 2008 and 2009 GDP.