As the real economy shows GDP is near 0%, we get....DOW 28,000?

Remember how I’ve mentioned that the economy has stayed out of recession and job loss mostly because US consumers keep spending? Well, we got a report today that indicate that last pillar is starting to crack.

Retail sales increased 0.3% last month, the government said Friday, matching the forecast of economists polled by MarketWatch.

The increase in sales was concentrated in just a few segments, however. If autos and gasoline are excluded, sales rose a scant 0.1%, with almost all of that gain coming from internet retailers….

Internet retailers also reported a nearly 1% increase in sales while receipts at auto dealers and grocers both climbed 0.5%.

Yet sales fell at restaurants, home centers and retailers that sell clothing, electronics, home furnishings, books and sporting goods.

Sales were basically flat at department stores and pharmacies.

With “core” retail sales were only up 0.1%, in a month when the Consumer Price Index rose by a seasonally-adjusted 0.4%. Put it together, and you have a second straight LOSS in real retail sales.

So the consumer is flagging, and on top of that, we got more proof from the Fed that the country’s manufacturing recession is continuing.

U.S. manufacturing output slumped in October by the most in six months as an auto workers’ strike at General Motors Co. curtailed vehicle production and the trade war continued to weigh on other factories.

The 0.6% decline in output followed a 0.5% decrease the previous month, Federal Reserve data showed Friday. Excluding the 7.1% drop in motor vehicle output, which was the largest since January, factory production decreased a more modest 0.1% for a second month.

Total industrial production, which also includes output at mines and utilities, slumped 0.8% in October, the largest setback since May 2018…

The median forecast of economists in the Bloomberg survey for manufacturing output called for a 0.7% decline. Of the three main industrial production groups, mining dropped for a second month on weakness in the oil patch, while utilities registered the sharpest drop since June. Capacity utilization, measuring the amount of a plant that is in use, fell to 76.7% from 77.5%. Capacity utilization at manufacturers decreased to 74.7%, the weakest since September 2017.

And even with the GM strike ending, do you really think that alone will stop the slide, especially when the rest of the manufacturing sector also had no increase in production for October? (check the report if you don’t believe me)

The Federal Reserve Bank of Atlanta looked at this and other disappointing economic data of the week and now predicts that there will be hardly any real economic growth at all in Q4 2019.

Now let’s see what Wall Street thinks about what is clearly a stalling economy.

Stocks rallied to record highs, with the Dow Jones Industrial Average topping 28,000 for the first time, Friday after White House officials said the U.S. and China are getting closer to a phase one trade deal.

"The important thing is to make sure that the deal is what we think it is," Commerce Secretary Wilbur Ross told FOX Business' Maria Bartiromo. He says there is a "very high probability" of a deal, but cautioned "the devil is always in the details."

Trump’s economic adviser, Larry Kudlow, likewise on Friday indicated the two sides were close to a deal and talks were so far "constructive."

Friday's buying ran the Dow Jones Industrial Average up more than 221 points, or 0.8 percent. It took 90 trading sessions for the index to rally from 27,000 to above 28,000

So Wall Street keeps blowing this stock market bubble higher because of BS statements from the Trump Administration? On a deal that hasn't been struck and would change...what???

I caught an exchange on Bloomberg this morning from two investment strategists, and both admitted that at this point, any trade deal with China won’t change the underlying fundamentals of the US economy. And both seemed perplexed as to why the market was Bubbling higher without any legitimate growth for either companies or the real economy.

"This trade deal, if it goes through...will have ZERO meaningful effect on global growth, nor will it have a meaningful effect on global trade". - #WallStreet portfolio manager on Bloomberg TV.

And why would you trust ANYTHING from Larry Coke-blow anyway? #MorningJoe #wiunion

— JakeEdwards (@JakeMadtown) November 15, 2019

And besides, is any trade deal going to pump revenues back up for exporting companies that have lost so much of their pricing power over the last 12 months?

When is the reality going to seep into the financial markets that Main Street is hitting the wall? And how much of a pullback of this inflated stock market are we going to see when that happens?

That flashing yellow light seems to be brighter after this week. And if Americans don’t open up their wallets for their Holiday shopping, the light is likely to turn red very soon.