Personal income and spending data out this morning underscored my observations on consumers stepping up to the plate.
Of course, when income climbs +0.4% and spending surges 1.0%, consumers must be digging in their piggy banks or maxing credit cards or both. In this case, its savings, which plunge five 5.0% to 3.1% from 3.6%.
The market has given up earlier gains and is now in the red after a Bloomberg report came out that the tax reform plan would be phased in over several year. According to the report, "House tax writers are discussing a gradual phase-in for the corporate tax-rate cut that President Donald Trump and Republican leaders want - a schedule that would have the rate reach 20 percent in 2022."
At midday the Dow is -72, the Nasdaq -6.25 and the S&P500 -853. Decliners led advancers 1744/1154 on the NYSE and 1910/871 on the Nasdaq. Technology continues to be a bright spot. Conversely, the health care sector is down over 1% after Merck (MRK) received several downgrades after it reported on Friday that it withdrew its European application for its cancer drug Keytruda. The consumer staples sector is also down 0.8%.
Let’s stay on the sidelines this afternoon.
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