Traders are reacting to Friday morning’s adjusted GDP report which shows slower growth than originally reported…

Gross domestic product, the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 1.6% from April to June, the Commerce Department said Friday…

Friday’s report also showed that companies barely managed to post profit gains, following several very profitable quarters. After-tax earnings edged up 0.1%, well off the previous quarter’s gain of 11.4%. First-quarter profits were revised down from the initial estimate of a 12.1% increase. – Wall Street Journal

The news initially caused markets to trade lower, giving traders with overnight short positions a nice payday. However, the market began rallying after Chairman Ben Bernanke began speaking in Jackson Hole.

The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.

Additional accommodation”

If you think the worst is behind us when it comes to the Eurpean debt crisis, Think Again!

Yesterday there were more riots in the streets of Athens as labor unions violently opposed a new proposal that would raise the retirement age and cut payments to pension recipients. It’s understandable that citizens would be discouraged at losing generous benefits that had been promised for years, but one has to stop and think about how realistic these promises have been.

Whether Greece is able to fulfill the labor union’s expectation of generous payday and retirement benefits or not, the international investing community continues to expect high levels of risk. The risk of a Greece or Spain default is a very serious issue with global repercussions. Many European banks have significant exposure to Greek and Spanish sovereign debt, and even the expectation of a default can cause illiquidity as banks

Market’s are off sharply Tuesday as investors grapple with numerous economic and political crosswinds. This morning, traders were greeted with a weaker-than-expected Consumer Confidence report. The index dropped to 52.9 in June and the May figure was revised lower to 62.7. According to Bloomberg, this index would need to come in above 90 to truly indicate that the economic rebound was on solid footing.

Reuters blames the weakness on two primary factors. First, the labor market continues to be soft and consumers are concerned with the employment situation. Those who have jobs may very well be choosing not to make discretionary purchases and instead build up a savings account in case their employment situation changes. Obviously those who do not have jobs are even more focused on reining in spending.

The second issue is the European overhang. While most US consumers don’t actually see significant changes in their lifestyle

Friday’s dismal retail sales report was largely overlooked as the market continued it’s oversold bounce. But despite the strength in the broad averages, the fundamental data in the report was concerning for both business owners in the retail sector as well as investors who have bid prices of retail stocks significantly higher over the past few quarters.

The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity. Economists are concerned that households will start trimming outlays as they continued to be battered by high unemployment and a swoon in stock prices. ~AP

Certain retail stocks have already begun to price in a slowdown in retail sales… For instance, Abercrombie & Fitch (ANF) has already

For any remaining employment optimists, the comments out of Washington from Ben Bernanke are certainly troubling. Last night the Federal Reserve Chairman sat down with Sam Donaldson (ABC) to discuss the state of the US economy. His words were less than encouraging:

The unemployment rate is still going to be high for a while, and that means that a lot of people are going to be under financial stress.

Last week, the employment report was released and was quite a disappointment to most traders. While government hiring increased as a result of new census workers coming online, the private sector is still struggling to create new jobs. Since each new government job must be funded by taxpayer revenues or additional borrowing, the number of new census workers isn’t exactly a benefit to the system as a whole.

Optimists might point to the declining unemployment rate as evidence that the picture

This morning’s unemployment report is being viewed as a positive data point with the number of initial claims dropping by 10,000. However, with the total adjusted number checking in at 453,000, a 10k drop is not really a significant decline. Analysts had been expecting the number to drop more and hit 450,000 for the month.

Unemployment has been an important issue, and one that has been difficult to tackle. Despite many stimulus projects aimed at improving the unemployment picture, workers are still finding it challenging to find jobs. This from a Reuters report on the data:

Although the economy has now grown for three straight quarters following the worst downturn since the 1930s and the recovery is broadening, stubbornly high unemployment is eroding President Barack Obama’s popularity… While other indicators support views the labor market recovery is firming, claims for jobless benefits remain above levels usually associated with sustainable

The IPO was managed by Merrill Lynch / Bank of America (BAC) and Goldman Sachs (GS). With such a diverse retail and institutional platform, one would have expected the shares to be placed in the hands of long-term

A lot has happened since May 4th when I penned a negative article on First Solar Inc. (FSLR). My expectation was that the crisis in the eurozone would have a material effect on stimulus for solar projects, which in turn would hurt the solar stocks which are so dependent on these subsidies. Since that time, FSLR has dropped from $143.72 to near $106 today, and many other stocks in the sector are down substantially more.

The concerns in the solar industry are certainly valid. Europe has been one of the primary champions of alternative energy and Germany and Spain have been especially beneficial with their generous programs to help defray costs for installing environmentally friendly energy sources. Without these stimulus programs, the demand for solar products could be significantly cut – and with excess capacity in the industry pricing may continue to suffer …

But how far is too far?

Credit and Debit card issuers, along with transaction processors were sharply lower on Friday after a Senate vote included restrictions on the fees that can be charged for these transactions. The vote essentially allowed the measures to be included in the Financial Reform bill and the regulations could have a dramatic impact on the profits for many of the companies involved.

Transaction Processors

The two most important companies affected by this bill are Visa Inc. (V) and Mastercard Inc. (MA). Both stocks were down sharply on the news – and both traded on heavy volume indicating institutional selling was extreme.

Visa is currently trading at about 20 times expected earnings for the year ending September, 2010 which is not an extremely rich multiple. But the technical pattern is very sobering with Visa dropping below the 200 day average on huge volume. Most investors are banking on the fact

With the crisis in Europe still on the radar (despite a Trillion dollar rescue package), investors have become more concerned about inflation. The beauty of the Euro when it was created was that individual governments didn’t have the ability to print their own currency. The expectation was that this would cause governments to be more conservative since they must actually match revenue to debt service costs – or at least be able to attract needed capital through issuing new bonds.

But as it turns out, the multi-country currency experiment is turning out to be a flop with the trillion dollar package to bail out Greece and other distressed countries likely to continue to put pressure on the purchasing power of the euro, and highlights the dangers of fiat currencies around the world.

The package was initially welcomed with the Euro bouncing quickly in hopes that the package would

When trading in an environment with extended prices and significant macro risks, even value and growth investors need to be particularly cognizant of technical trends. For months, the retail industry has been trading higher as the US consumer has provided much more strength than expected. Whether this strength comes from strategic defaults, lower savings rates, or government stimulus initiatives, the bottom line is that retail outlets have seen growing sales and at least a temporarily healthier environment.

But this week, the retail index has fallen a bit behind the broad market action, which makes me concerned that the sector may be losing its leadership. Tuesday was a difficult day for nearly every sector as Greek worries led to a sell-off in widely held growth names. It was completely normal for retail to be hit especially hard because the industry has become a “high beta” or more volatile area