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The week looks to be setting up to end on a sour note as the major equity indices are all trending lower. In a morning that is extremely light on news, there really is not a particular culprit sending stocks lower. This morning, Nike (NKE) shares are performing well after beating on earnings and revenue expectations, while the Dow component, DuPont (DD), is trending lower after releasing cautious guidance after the close, yesterday. On the IPO front, Michaels Stores shares are expected to begin trading for the first time at the lower-end of the valuation range this morning. Verizon Communications (VZ) is not getting any help this morning, after Germany's government announced that the country will be dropping the American phone provider over &Jennifer Coombs, Research Analystquot;spying" worries. Ultimately, it's a very mixed market this morning, skewing to the downside.

Although the Federal Reserve's decision to not raise interest rates in the near-term gave the stock market some relief, high inflation is still harming the average American consumer. Inflation will naturally continue to rise, but wages are not rising by an equal amount which is causing a squeeze among American consumers. It is imperative to a full economic recovery to have job creation and an increase in consumer spending, but both are still doggy-paddling upstream at the moment. Wages and salaries among American households have increased 2.5% year-over-year on average since the last recession, compared with 4.3% in the previous expansion. Consumer spending, which we note makes up almost 70% of the total gross domestic product (GDP), has grown an average 2.2% in this recovery, lagging behind the 3% advance in the prior one (i.e. after the crash in 2001). Yesterday's consumer spending report showed clothing purchases dropped 0.9% in May from the prior month after adjusting for inflation. Americans spent 0.4% less on dining out at restaurants and receipts at movie theaters slumped a huge 10.3%, which is a discouraging sign heading into the summer months. Below is a chart of the US GDP growth rate compared to the rate of inflation since 2007. In an ideal world, the two should move in-tandem, but this recent crossover is a bit worrisome.

All in all, we are not on the verge of another collapse. The market may pullback in advance of earnings, but it's just a headwind in this slow crawl to the finish line.