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Investing Specialists

U.S. Economy Looking a Little Accident Prone

The litany of misses this week included the retail sales report, higher consumer prices, and fewer housing starts.

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This week, the S&P 500 squeaked out yet another small weekly gain (0.6%) even as corporate earnings were mixed and almost every major economic indicator missed the mark. The litany of misses included the retail sales report, higher consumer prices, and fewer housing starts. While the banking sector earnings reports have been quite strong, they all caution that things may not look as good in a few months as mortgage activity dries up. News out of the tech sector was not great with poor numbers or poor reactions to numbers from  Intel (INTC),  Microsoft (MSFT), and  Google (GOOG).

So what gives? Well, weaker numbers might mean that quantitative easing could continue longer than expected. Indeed, the Fed seemed to indicate it was not set to pull the rug out from under its bond-buying programs according to some prescheduled, formulaic agenda. I wonder if a negative GDP report would knock investors out of their torpor and QE obsession?

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.