US Economy Still On Bullish Track

Stock traders took some profits today. They were probably nervous that Fed Chair Jerome Powell will be less dovish tomorrow than the markets are about the outlook for rate cuts beyond 25bps in September. We've been less dovish than the markets since mid-June because we've been more bullish on the economy and the labor market than the consensus.

Today's economic releases showed the US economy continues to chug along. The services-providing sector remains strong, and there are even green shoots sprouting in housing. Abroad, there's some optimism percolating that real growth may be improving in Europe. Nevertheless, we continue to favor the US over the Eurozone. The US has a much more compelling growth story, in our opinion.