Wall Street Greek: Today's Key Market News

(Stocks in this article: NYSE: F, NYSE: HNZ, NASDAQ: WFMI, NASDAQ: OATS, NYSE: ANN, NASDAQ: BEBE, NYSE: BKC, NASDAQ: CSUN, NYSE: TRB)

July's Durable Goods Orders were reported today, and the measure was well ahead of expectations. Before you get too excited, lets consider that this data reflects business sentiment in July and may not be appropriate for current economic conditions. In fact, it may well be dangerous.

Heavy ordering can set the stage for sell-through failure, and support the turn to recession. If sell-through does not follow, retailers face price reduction, earnings shortfall and potentially business consolidation. Now, durables are supported by international demand, there's no doubt. Still, we expect much of the drivers behind the data reflect overly optimistic domestic demand expectations at just the wrong time for it. After all, what are consumers going to do with these newly ordered washing machines if they can't even afford to pay their electric bill, or if they don't have a home to place them in?

Within the "Market-Moving News" below, and in our similar sidebar section, you will find an article that shows PIMCO's Bill Gross agrees with our view on the government's role in staving off recession. Bill and I agree that weakened consumer demand, stemming from the many stresses on the poor little fellow, least of which are housing costs and loss of home equity, are likely to drive the economy into recession. If the government or its agents (read Fed) can do something to provide support here, it has broader implications to our economy on the whole.

Market-Moving News