The Morning View: August, 28 2020

BY: MARSHALL BARTLETT
Senior Vice President / Portfolio Manager

Announced this morning, Personal Income increased 0.4% in July, more than expected but only a slight rebound from the negative figures the previous month.  In addition, Personal Spending increased 1.9% in July, also more than estimates, but much less than the increase in the previous month.  The PCE core deflator, a measure of inflation, increased only 1.3% in July on an annual basis, well below the “average” target of 2% as stated this week by the Federal Reserve.  While both income and spending did increase in the previous month, the amounts suggest the extra benefits from fiscal stimulus may be beginning to wear off.  With consumer spending such a large part of the economy, both spending and income will need to be closely watched as the Federal Government debates the terms of additional fiscal stimulus and as we continue through the impacts of COVID-19 in the months ahead.  In all, bond yields are slightly lower and equity futures are higher this morning as we head into the market open.

This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.