Seeking Alpha wishes our subscribers a great Labor Day Weekend! Wall Street Breakfast won't be published with markets closed on Monday, but tune back in Tuesday.There's a lot to celebrate as August comes to an end, with a late summer rally that saw stock market indexes head back to all-time highs. The Dow Jones Industrial Average (
DJI) just notched its 25th record close of the year, while the S&P 500 (
SP500) is within striking distance. The Nasdaq (
COMP:IND) has also regained more than 1,000 points over the past month, though there are still some tech pressures out there following the latest earnings from AI darling and market leader Nvidia (
NVDA).
Macro lens: U.S. Q2 GDP growth was revised up to a solid 3.0% rate on Thursday, reflecting an upward adjustment to consumer spending. It's all about the consumer these days, which has seen the pace of inflation come down
across the board. Meanwhile, the U.S. central bank's favorite gauge of price pressures will be released this morning at 8:30 AM ET, and expectations are for
further cooling in the core PCE index (see below).
"Stocks are rapidly recovering their losses because fears that the rate of economic growth was deteriorating are
fading just as quickly," writes SA Investing Group Leader Lawrence Fuller. "On top of that, investors are adding to risk assets in anticipation of the Fed's rate-cut cycle, which has been a harbinger of outperformance for the stock market during periods when the economy slows but avoids a recession. This is why better-than-expected economic data is now good news for the stock market, as inflation is no longer the primary concern for the consensus of investors or the Fed."
Let's party! Further signs of healthy spending will be seen this weekend, with a record number of people forecast to hit the roads for Labor Day. 17M people are additionally expected to pass through airport security, according to the TSA, and United (
UAL) and American Airlines (
AAL) said they are anticipating their busiest Labor Day operations on record. Speaking of the strong consumer, "back-to-school and college spending along with special deal days offered by retailers clearly helped," added Jack Kleinhenz, chief economist at the National Retail Federation.
