July retail sales were flat. Excluding autos and gasoline, sales were up 0.1%. Expectations were for a 0.2% increase, following the disappointing 0.2% rise in June. It is likely that our GDP numbers will be revised downward.
Europe's economy is doing no better than ours. Germany's economy declined 0.2% in the second quarter and France was stagnant.
This normally would weigh on the markets. But we have not seen this due to the Treasury Department's printing of money and the Federal Reserve's Quantitative Easing purchasing bonds. This money has flowed into the markets and driven stock and bond prices up. In my opinion, the market will stagnate for the rest of the year as this government spending will counteract the downward presure of a lackluster economy.