The Double Dippers Are on the Defensive

The futures currently indicate that the bears are going to give it another chance this morning. Just like last year, the Double Dip thesis is now on the defensive. The industrial production report combined with retail sales figures show that the economy isn’t heading off the cliff during the third quarter. We’re still far from healthy, but as of yet, there are few signs that the economy is actually losing ground.

What really stands out in my mind is what we’re hearing from companies. Or rather, what we’re not hearing. Overall, companies aren’t announcing massive layoffs or plans of business retrenchment (though a few have, they’re exceptions).

The good earnings news continues as both Staples ($SPLS) and Target ($TGT) beat estimates this morning. Yesterday, Walmart ($WMT) and Home Depot ($HD) beat estimates and guided higher. I think that should be getting more attention than it has.

Something else that’s helping the economy is that gasoline prices have eased back a little. Yes, gasoline is still expensive, but it’s not as expensive as before. Cheaper fuel has a major impact on consumer spending which is the key driver of the U.S. economy.

Posted by on August 17th, 2011 at 9:02 am


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