Wall Street and Main Street Divergence Widens, as Leading Economic Indicators Worsen in August

I’ve never seen such a disconnect with reality. Even bringing this up, at a time when markets are at new record highs makes me feel ashamed, almost embarrassed to mention news that is bad. See, I’m not making up the news, just interpreting it. If some people are beguiled by a bearish tone on my blog, I’d like to entreat you to get rid of all the negative headlines out there so that I can join you in your war against the bears.

New record highs and the economic conditions continue to deteriorate.

Does it even matter anymore?

Via Briefing.com

Leading Economic Index Turns Negative in August
The Conference Board’s Leading Economic Index declined 0.2% in August (Briefing.com consensus +0.1%) on the back of an upwardly revised 0.5% increase (from 0.4%) for July. This was the second time over the last four months that the index has been negative.

The key takeaway from the report is that it reflected the lingering disconnect between Wall Street and Main Street. To wit, positive contributions from the financial components were more than offset by large negative contributions from average weekly manufacturing hours and new orders.

The largest drags on the index in August were average weekly manufacturing hours (-0.13 percentage points) and ISM new orders (-0.13 percentage points) while the largest boosts came from the interest rate spread (+0.13 percentage points) and stock prices (+0.05 percentage points).
Notwithstanding the decline in August, the leading economic index increased 0.9% for the six-month period ending in August versus increasing 0.2% during the previous six months.
The Coincident Economic Index increased 0.1% in August after increasing 0.3% in July.
The Lagging Economic Index increased 0.2% in August after increasing 0.2% in July.