This is the Wall Street Digest Hotline for Monday morning, July 13, 2009.

On Friday, the markets were mixed in reaction to the Consumer Confidence Report. The S&P 500 and the Dow were down 0.4 percent and Nasdaq was up 0.2 percent. The Reuters/University of Michigan preliminary index of consumer sentiment fell by more than forecasted to 64.6 from 70.8 in the prior month. Consumer spending is critical to an economic recovery. The growing unemployment rate and retraction of credit will continue to hamper this major economic engine for years.

The S&P Futures were trading down early this morning and have moved into positive territory as earnings season moves into full force this week. Earnings reports, along with the Producer Price Index report on Tuesday, and the Consumer Price Index report on Wednesday, will be major contributors to this week's market moves.

President Obama returned from the G8 Summit in Italy this weekend to face a decline in his approval rating, but will continue to push for more spending to revive our economy. On Friday, while speaking in Italy at the G8 summit, President Obama acknowledged to his colleagues that the U.S.'s debt is a problem, and noted that healthcare is a major component to our recovery. President Obama said, "the only way we can reduce our debt is to reduce the cost of healtcare, no one denies this." President Obama, we would like to go on record as strongly disagreeing.

The calendar is beginning to move fast on our President. His inauguration party is over, the first 100 days are long past, and progress is yet to be measured with any notable improvement. Our president will soon have to stop blaming the previous administration and policies of the past. He must move forward and create jobs, stop the housing decline, and restore consumer confidence.

Our market outlook for the summer is flat or lower. We expect to the markets will test the lows of March 9, 2009, this fall. The second quarter rally was impressive, as are most bear market rallies. A classic bear market rally is 50 percent from a recent bottom. In early March 2009, the S&P 500 traded at a low of 667; on June 9, 2009, the S&P 500 traded at 956, a 43 percent move-up.

The next Hotline Update will be on Tuesday morning, July 14, 2009.

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