Happy Friday! It is Friday, August 28 and the S&P rallies to its best August since 1986. Capital One cuts card limits amid jobless-aid impasse while U.S. consumer spending rose more slowly in July. The House and White House are no closer to a deal on the next stimulus bill while the U.S. announces a deal with Abbott Laboratories for 150 million rapid Covid-19 tests.
It’s been a great August, up 6% for the S&P 500, the best August since 1986. “August is going to come out looking like capital markets are endorsing a US cyclical recovery,” Nicholas Colas from DataTrek told clients in a recent note.
Capital One Financial Corp. is cutting borrowing limits on credit cards, reining in its exposure as the U.S. reduces support for millions of unemployed Americans. The adjustments, which the company said it makes from time to time, set off a swift outcry on social media.
House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows talked for the first time in three weeks Thursday about the stalemate on a new pandemic relief bill without making any breakthrough to put negotiations back on track. Pelosi said Democrats are continuing to insist on their demand that the White House and congressional Republicans double their offer on a stimulus package for an economy still reeling from high unemployment and business closures spurred by the pandemic.
Fed Chairman Jerome Powell announced a major policy shift Thursday to “average inflation targeting.” That means the central bank will be more inclined to allow inflation to run higher than the standard 2% target before hiking interest rates. In addition to the inflation change, the Fed shifted its approach to employment in a way that will focus on those at the lower end of the income spectrum.
The Trump administration unveiled Thursday a $750 million deal to buy 150 million rapid Covid-19 tests from Abbott Laboratories , a move that would substantially expand the nation’s capacity for rapid testing. The Food and Drug Administration on Wednesday granted emergency-use authorization to the company for a $5 rapid-response Covid-19 antigen test that is roughly the size of a credit card.
U.S. consumer spending rose more moderately pace in July than in prior months, as incomes climbed and the labor market continued to add jobs. Personal consumption expenditures, a measure of household spending on everything from haircuts to new cars, increased a seasonally adjusted 1.9% in July from the prior month, the Commerce Department said Friday.