![\"Performance](\"https:\/\/envisionco.net\/wp-content\/uploads\/2016\/07\/Performance-7-29-2016-300x70.png\")
<\/a><\/p>\nThe SPY (SP500) ETF has traded in a tight range between $215.31 on the downside and $217.54 on the upside. That spread represents just 1.02% of the closing price on Friday. The Volatility Index (VIX) closed at 11.87, a ridiculously low number based on history.<\/p>\n
We are now start August, which has been the worst month of the year over the last 20 years. The Dow has averaged a decline of 1.30% during that time period.<\/p>\n
Treasury rates fell by about 10 basis points from the 5-year bond on out in reaction to the lower GDP number (see below).<\/p>\n ECONOMICS<\/p>\n In a shocking report, GDP grew 1.22% in Q2. That was way off the GDPNow estimate which was 2.4% last week and the NY Fed’s Nowcast which had growth estimated at 2.2%. GDPNow was revised lower earlier\u00a0in the week\u00a0to 1.8% but it was a miss that was simply unexpected. The consensus was for a 2.6% advance.<\/p>\n Of course, GDP might end up being revised higher (or lower) as more data comes in, but growth of 1.22% is a big disappointment. The number was hurt by a significant fall in inventories. The good news is that when businesses rebuild their inventory levels, that will provide a boost to GDP down the line. On the positive side, consumption increased by 2.8% for the quarter, the highest growth rate since 2014.<\/p>\n The GDP report must have even surprised the Fed, which earlier in the week indicated that an interest rate hike is back on the table. The Fed stated that “near-term risks to the economic outlook have diminished.”<\/p>\n Of late, economic reports have been coming in better than expected as evidenced by the Citibank Surprise Index that we posted a couple weeks back (click here<\/a>). \u00a0But with the lower GDP number, with the possible slowdown from Brexit, geopolitical problems and the US Presidential election, economic risk to the downside is increasing.<\/p>\n Jobless claims rose to 266k, up 14k from last week. But 266k is a very low number, the labor market continues to be tight.<\/p>\n For Q3, the NY Fed Nowcast dropped only 10 basis points, showing respectable growth of 2.50%.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" PERFORMANCE The US equity markets were flat, but international markets advanced by 1.53% and the bond index managed a 0.44% gain. The US dollar dropped by 1.83% and crude took another hit and fell by 6.49%. July overall turned out … Continue reading ![\"SPY](\"https:\/\/envisionco.net\/wp-content\/uploads\/2016\/07\/SPY-7-31-2016-300x150.png\")
<\/a><\/p>\n![\"Treasury](\"https:\/\/envisionco.net\/wp-content\/uploads\/2016\/07\/Treasury-Rates-7-29-2016-300x171.png\")
<\/a><\/p>\n![\"GDPNow](\"https:\/\/envisionco.net\/wp-content\/uploads\/2016\/07\/GDPNow-July-29-2016-300x206.png\")
<\/a><\/p>\n![\"GDP](\"https:\/\/envisionco.net\/wp-content\/uploads\/2016\/07\/GDP-Estimates-7-29-2016-300x149.png\")
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