There are concerns that consumer spending could decline, leading to a worsening economic downtrend. Such a gloomy trend could eventually cause a stock market slump. On August 6, Dallas Fed President Robert Kaplan is scheduled to provide a speech. The speech will be followed up with Q2 household debt and credit report.
The new economic data and jobless claims could set the sentiment around the stock market for the near-term. The U.S. stock market has rallied in recent months with strong performances from Big Tech. If unemployment data is higher than the expectations of investors, economists say it could trigger a storm of negative factors.
Morning Consult’s chief economist John Leer said people are not able to pay rent and basic necessities. The concerning trend could slow down the stock market, especially considering that it has been primarily retail-driven. Leer said: I’m not talking about luxuries and going on vacation. Your car payment is still your car payment. That’s not adjustable. There’s a real risk of rising delinquencies.