Recapping the day's news and newsmakers through the lens of CNBC.
The new consumer normal
One more sign that the American consumer is going through the spending equivalent of split personality disorder: Retail sales were up in August, but by only a smidgeon—0.2 percent, versus July's 0.4 percent, a level analysts had expected to be repeated.
The problem: consumers are shelling out for big-ticket items like cars and furniture but cutting back on clothing, building materials and sporting goods. Some retail executives think the frugal habits consumers in developed countries adopted during the Great Recession may by permanent.
"So listen, they're positive numbers, but positively less than we expected."—CNBC's Rick Santelli
"It is now ingrained for people to wait for the sales. The sales have become ongoing and constant. It became quite fashionable to be penny pinching but that kind of thing isn't sustainable. After a while it becomes a grind to shop around for the cheapest product."— Euromonitor senior retailing analyst Antonia Branston
Do consumers have the Fed blues?
Indeed, yet another report says consumer sentiment fell to a five-month low in August, well below what economists had expected. Rising interest rates appear to be a big factor, making consumers worry the economy and jobs market will grow too slowly.
"If changes in monetary and fiscal policies ... act to slow economic growth, declining confidence could lengthen and deepen the slowdown."—Richard Curtin, director of the Thomson Reuters/University of Michigan consumer confidence survey
One thing most Americans agree on
Let bygones be bygones? Not yet! This, at least, is the public's attitude toward Wall Street, still seen as the villain in the Great Recession triggered by the Lehman Brothers collapse five years ago. An NBC News/Wall Street Journal poll found that just 14 percent of Americans have a favorable view of Wall Street, putting it on a par with that other reviled institution, Congress. Some 42 percent were negative on Wall Street. The findings reflect the public's feeling that the country is on the wrong track, and that the economy won't get much better in the next year. American's biggest worry? That they won't have access to affordable health care.
"Fewer than half (45 percent) approve of President Barack Obama's handling of the economy, while 52 percent disapprove."—CNBC's John Harwood
Gold's last hurrah
When investors worry, they flock to gold, right? Well, that's what the Chinese Aunties are doing.
That's the term for consumers in China who have been buying up gold jewelry to benefit from this year's drop in prices. About 345 tons of gold was made into jewelry in China during the first half of the year, up 41 percent, says Thomson Reuters. That demand actually helped support prices. The firm thinks gold, now around $1,326 an ounce, might rise to around $1,500 by early 2014, before falling back to $1,350. Among the factors weighing on gold prices are speculation about Fed tapering and the waning influence of gold ETFs.
"We think that the vast majority of the weak-handed holders are out of the market, so there could be a last hurrah [in gold prices] in the fourth quarter."—Rhona O'Connell, head of metals research and forecasts at Thomson Reuters
Don't anticipate much from stocks
When long-term investors plan for things like retirement, they have to pick a number for anticipated stock returns. So what can we expect for the next decade? How about 3 percent a year, on top of inflation? That's the gloomy estimate from Yale economist Robert Shiller, based on his somewhat controversial "cyclically adjusted price-to-earnings ratio," or CAPE, which indicates stocks are overpriced today. Unlike the standard P/E ratio of current prices divided by 12 months' earnings, CAPE compares current share prices to inflation-adjusted returns for the past 10 years. It shows stocks currently priced at 24 times earnings, well above the long-term average of 16. The regular P/E is at 19, versus its average of 15.
"I'm not really saying don't invest in stocks. [But] don't expect miracles."—Yale economist Robert Shiller
"I believe the CAPE ratio's overly pessimistic predictions are based on biased earnings data."—Wharton finance professor Jeremy Siegel
—By Jeff Brown, Special to CNBC.com