Is it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost? Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be 1987 playing out, where the market's decline presaged nothing other than a momentary loss of consumer confidence?
It's hard not to think about that when in the last 36 hours we've had decent employment claims, some really good numbers from retailers Ralph Lauren ($RL), Macy's ($M) and Nordstrom ($JWN), not to mention aggregate retail sales numbers. It's hard not to question the recession thesis when Caterpillar ($CAT) comes on national television and says orders are looking real good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe.
Recession-watch is a new game. The Great Recession snuck up on us courtesy of the fraudulence and laxity of the previous era. This time everyone's looking out for it and, until we see some real doozies, and we haven't, we are going to brand Dillard's ($DDS) and J.C. Penney ($JCP) as ne'er-do-wells and accept that the consumer is more like someone who shopped excessively at Nordstrom, which had its best July event ever.
Recession is a two-way street: part Washington, part European. President Obama was unable to hurt the market in the last few days, which has become an unusual circumstance. Europe's one-two punch of a short ban and vacations has diminished the bad news flow. You know what? We'll take it!
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