Surprisingly weak consumer sentiment and a warning from Chevron and the IEA overcame a bullish tech call by Goldman to keep stocks negative for the week.
Market Statistics On Friday a surprise drop in Consumer Sentiment for July caught traders off guard and the Dow lost ground for the fourth consecutive week. Consumer Sentiment for July fell unexpectedly to 64.6 from 70.0 and increased fears of a double dip recession. The July decline was led by a sharp drop in the expectations component from 69.2 to 60.9. The present conditions component fell from 73.2 to 70.4. The drop in the headline number erased gains from the last two months and knocked the index back to levels not seen since late March. The accelerated drop in non-farm payrolls we saw last week and continued high weekly jobless claims appear to he weighing on consumers. We saw a sharp drop in weekly same store sales and mortgage loan applications are falling. Credit card companies are continuing to lower available credit and raising interest rates and payment terms on existing balances. The stage is set for a double dip recession if something does not happen soon.
Consumer Sentiment Chart The other two reports on Friday were lagging reports and were ignored. The International Trade deficit narrowed slightly from $26 billion in May from $28.8 billion in April. Import prices rose for the seventh consecutive month in June by +3.2% but the majority of the surge was due to the rise in crude prices.
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