This is such a suckers rally. The economy is still in the midst of a deep recession, with structural changes in spending patterns and rising unemployment. However, stocks have surprised on the upside this earnings season on nothing more than solid cost cutting measures. The quality of the earnings is not there, plain and simple. Where is earnings growth going to come from in the coming quarters, you can only trim so much from a budget before you can’t produce at any reasonable volume.

After almost falling below 8,000 a few weeks ago, we see the Dow above 9,000, and economic optimism is cool again, boy how quickly things can change. We had calls for a second stimulus, furthering the deficit and debt in the name of economic recovery.

Market Snapshot

In afternoon trading, all three major averages are decidedly lower on the last trading day of the week following poor earnings results from Microsoft and Amazon after yesterday’s closing bell. The Dow Jones Industrial Average is down 28.04, or 0.3 %, to 9,041.25, while the Standard & Poor’s 500 index lost 4.92, or 0.5 %, to 971.37. The Nasdaq is the biggest loser so far, with the tech heavy composite falling 23.28, or 1.2 %, to 1,950.32.

Markets were mixed in the pre market before falling lower after the final reading of Consumer Sentiment in July. The reading came in at 66, down from June’s number of 70.8…wrong direction!

Only People Seeing Wage Increases Are Minimum Wagers!

Federal law increased the hourly minimum wage rate from $6.55 to $7.25 on Friday. Workers in 30 states will benefit from the federal increase, which is the last of three provided under the Fair Minimum Wage Act of 2007. The federal minimum wage increased to $5.85 per hour on July 24, 2007, under the first increase, to $6.55 per hour on July 24, 2008, under the second increase and to $7.25 per hour on Friday under the third increase. Workers in the District in Colombia, where the minimum wage is required to be $1 more than the federal minimum wage will also benefit under Friday’s increase.