The summer stock rally faded this week on a lack of news regarding further monetary stimulus, combined with data releases confirming slow economic growth.
-John Toohey, vice president, equity investments
- The stock rally faded last week with lack of news on further monetary stimulus. The USAA team - while agnostic regarding the probability of such a move - remains doubtful that Benanke's Jackson Hole announcement will have much of an effect on markets given that banks are already flush with money to lend, combined with the current level of ultralow interest rates.
- The S&P 500 closed the week down, U.S. Treasury bonds rallied and gold rose. The economic data continued to support a stubbornly slow U.S. recovery. Second-quarter real GDP growth was revised slightly upward to a relatively anemic pace.
- Consumer confidence remains weak, but the Thomson Reuters/University of Michigan consumer sentiment index for August rose slightly. Rising gas prices, high unemployment and muted income growth have likely impacted indexes.