After suffering big losses in August due to negative trade headlines, US stock markets have reversed in September and are now just below the all-time highs seen in late July. Easing fears of an impending recession coupled with now-positive trade headlines have lifted the Dow, S&P, and NASDAQ. The closely watched S&P 500 is currently trading at 3,016, a whisker below its all-time closing high of 3,025 hit back on July 26, 2019. A solid economic environment coupled with a strong job market and rising wages are a few other reasons for the rise in the equity markets.
The US consumer continued to spend in August thanks to a strong job market and higher wage growth. August retail sales rose 0.4% versus the 0.2% expected while July was revised higher to 0.8% from 0.7%. This signals that the consumer remains alive and well with the ability and willingness to spend. With consumer spending making up two-thirds of the US economy, this is great news leading into 3rd Quarter Gross Domestic Product data and throws a wet towel on any near-term recession chatter.
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