I’d say it’s another day of positive economic news and indifferent markets!  GDP revisions showed consumer spending wasn’t as poor as expected from April to June, jobless claims implied improvement from the prior week, and Boeing reported the 787 could fly by year’s end. Yet stocks and bonds continue to ignore fundamentals in favor of bouncing around aimlessly in recent price ranges.

At 1:30 the S&P is 0.32% lower to 1,024, while the NASDAQ is -0.75% to 2009. Meanwhile, the Dow is now trading 0.07% higher at 9,552 . On the debt side of the marketplace, the Treasury Department has successfully auctioned $28 billion 7 year notes. Following the auction the rates market rallied a bit but quickly returned to pre-auction price levels. READ MORE

GDP revisions for the second quarter were mostly positive. The headline continued to indicate that gross domestic product fell 1%, compared with a 6.4% contraction from January to March, but underlying fundamentals were encouraging.

Inventories were slashed further than first reported ― down $159.2 billion compared with -$141.1 billion ― suggesting that businesses will have to restock rapidly when growth returns, just as analysts had hoped. Meanwhile, consumer spending, which represents two-thirds of the economy, was revised up to -1.0% from 1.2%.

The bad news was a downward revision to compensation in the first quarter, as noted by Joseph LaVorgna, chief US economist at Deutsche Bank. “While the inventory liquidation news bodes for an even stronger production rebound in H2, downward revisions to personal income darken prospects for household consumption, he said, noting that wages and salary income was revised lower by $31.1 billion in Q1.

For the labor market, claims for jobless benefits remain stubbornly high. Initial claims fell 10k to 570,000 last week, the lowest level since the first week of August, but that’s far from positive considering that any number higher than 360k indicates the labor market is bleeding. 

Continuing claims, or the number of people continuing to receive jobless benefits, fell by 119k in mid-August to 6.113 million. That’s a big drop, but it’s more than likely that the “improvement” merely reflects the unemployed moving from receiving regular benefits to receiving emergency ones, or perhaps none at all.

“Seeing a six-figure improvement in continuing claims always makes us somewhat dubious, as it is highly probable that the reduction was in fact caused by people losing their benefits as opposed to strong job creation,” said Ian Pollick, strategist at TD Securities.

Looking ahead, the market's up and down disposition may be exacerbated by a lack of liquidity as many market participants are out on vacation until after the Labor Day holiday. Look for continued choppy price action contained by recent ranges.