Positive surprises and new stock records

For all the persistent questions and doubts about what happens next, the U.S. economy is beating forecasts again during the summer and Wall Street stocks are clocking new highs.

It’s Friday, so today I’ll provide a quick overview of what’s happening in global markets and then offer you some weekend reading suggestions away from the headlines.

Today’s Market Minute

* U.S. President Donald Trump’s administration will ask a court to allow the release of grand jury testimony in the case of deceased convicted sex offender Jeffrey Epstein, after some of his supporters reacted in fury to a report concluding there was no evidence to support long-running theories about his case.

* Britain’s stock market finally appears to be reversing years of underperformance against the rest of Europe, as a UK/U.S. trade deal, lighter regulation and cheap stocks deliver juicy returns that are starting to attract foreign investors.

* Federal Reserve Chair Jerome Powell on Thursday responded to a Trump administration official’s demands for information about cost overruns for a renovation project at the central bank’s Washington headquarters campus.

* No matter what happens with Chair Powell moving forward, the supposedly sacrosanct notion of Fed independence has already been shattered, writes ROI columnist Jamie McGeever.

* U.S. President Donald Trump has singled out the coal industry as a key driver of U.S. energy dominance, but utilities have identified quicker and cheaper paths to boost power supplies, argues ROI columnist Gavin Maguire.

Positive surprises and new stock records

The week’s big drama surrounded the mounting political pressure on the Federal Reserve Chair, which continued to smolder. Jerome Powell responded overnight to White House demands for information about cost overruns for a renovation project at Fed headquarters - an issue some think could yet be used as a reason for President Donald Trump to fire the Fed boss.

But U.S. economic updates in the backdrop were unexpectedly upbeat.

Following on from Wednesday’s forecast-beating industrial numbers for June and relatively benign producer price data, Thursday saw an equally impressive jump in retail sales for the month, another drop in weekly jobless claims and a surprise jump in the Philadelphia Fed’s business confidence survey for July.

There were one or two blots in the day’s releases, such as another drop in housing indexes and rising input price components in the Philly Fed poll, but the overall picture has cut across much of the pessimism about the state of the economy.

Along with decent second-quarter corporate earnings so far, the week’s economic health checks have been enough to lift the S&P 500 and Nasdaq to new record highs, and stock futures are positive again ahead of Friday’s bell.

Capturing how investors have been slightly caught off guard, U.S. economic “surprise” indexes have returned to their most positive since May.

But, also partly reflecting why U.S. markets continue to lag many major bourses around the world, the equivalent surprise indexes for the euro zone and G10 countries as a group are even more positive and at their highest over a year.

The flip side of the economic numbers - which leave the Atlanta Fed’s GDP model showing 2.4% growth for the second quarter - is that it casts some doubt on any urgency for Fed easing.

Despite that, Fed board governor Christopher Waller - tipped by some as a possible Trump pick to replace Powell as Chair - continued to say rates could be cut as soon as this month.