Wall Street Greek: Market Report: Personal Spending & Sentiment Key

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The City streets empty out over the last couple weeks of the summer, and the effect of holiday sunning season is exacerbated on the last couple Fridays. New York can almost feel like an old Greek village in the midday hours when the Greeks nap away the hottest part of the day. Even in Greece, like New York, you will still find the wandering tourist complaining about all the shops being shuttered. Thus, we expect a good many of you are reading this from your summer rental balcony. I'm still waiting for my invite...

Market Report

Personal Income and Spending

According to an early interviewee at Bloomberg Radio, "back to school" shopping has picked up. Still, that's a normal seasonal pattern that would not reflect economic recovery, so we were not so enthused.

A bit premature in the summer for back to school impact, Personal Spending only increased 0.2% in July, and much of that came as a result of "Cash for Clunkers." That was evident in the 1.8% rise in spending on Durable Goods, and the government notes on auto impact. Set to run out at the end of August, the CARS program was never more than a stop-gap measure to help an ailing auto sector back to its feet. Retail spending still took a big hit in the most recently reported data.

Personal Income was flat in July, after a 1.1% drop in June on the completion of a fiscal stimulus program. Excluding the impact of that program, income rose 0.2% in June and 0.1% in July.

The Core PCE Price Index, a key measure of inflation that excludes the impact of volatile food and energy prices, increased 0.1% in July. Including food and energy, prices were approximately level, after posting a 0.5% increase in June.

Reuters/University of Michigan Consumer Sentiment

At 10:00 a.m., look for the University of Michigan's take on consumer sentiment. This index, alongside the Conference Board's measure, dropped precipitously in early August. Since then, the Conference Board's tally showed a bounce. Economists are looking for a slight improvement in today's metric as well, to 64.0, from 63.2 in the early part of the month. Much of the improvement has come with early anticipation of economic recovery, stock market rise of approximately 50% since March, and a less than dire global outlook. At this point, however, consumers are asking the question, "how long is it going to take before I get my old life back." Some speculate the days of free money will never return and consumers will bear the scar of this recession for some time.

Corporate EPS

Another Canadian bank reports results today, and the short list includes Bank of Nova Scotia (NYSE: BNS), Frontline Limited (NYSE: FRO), InfoSonics (Nasdaq: IFON), Tiffany & Co. (NYSE: TIF) and others.