Walmart is giving warning that they are seeing changes in spending from their customers. This is important because Walmart is so large that they represent the average consumer and it is the average consumer that primarily drives the economy. As the average consumers goes, so does the economy. This fits the narrative of the expected overall global slowdown and Walmart is a good barometer.
German Chancellor Angela Merkel pledged to support the statement from the European Central Bank (ECB) about more aid for Spain however she is insisting that Spain will have to comply with all of the conditions which it so far has not. The world seems to hang on the words of these economic decision makers and what they plan to do. So far Germany has complained and then caved in with each step of the bailout. We can probably expect it to continue for the time being.
Meanwhile, euro zone economies saw their GDP fall by 0.2% for the quarter and -0.4% year over year. This seems to confirm that despite massive bailouts and stimulus that Europe is struggling anyways and continues to fall into recession. Low to no growth and rising debts is not an indication that things are getting better over there.
US Prices were flat for the month and up 1.7% year over year. While food and energy prices have been rising much of the cause seems to be the drought in the Midwest which is the worst since the dust bowl.
The markets await the result from the Fed Meeting in Jackson Hole Wyoming and the Republican convention while the fiscal cliff draws closer. US economic activity is likely to continue to slow down towards the end of the year which should make the blame game between the Presidential candidates that much more interesting during the upcoming debates. It seems most businesses, institutions, and consumers alike are waiting to see what will happen with the election so it is less and less likely we will see any major economic or market developments until after the election.