Stocks are poised for a lower opening Monday following a big drop in Asian markets over the past two trading days. China’s main index fell nearly 3% on Friday and then followed with a 6.7% decline on Monday. U.S. markets appear skittish as investors worry that the global recovery is losing steam. Investors will be waiting for the government’s monthly jobs report to be released on Friday.

Consumer spending rose 0.2% in July. While the increase is welcome news we caution that the popular Cash for Clunkers program provided some of the impetus for this rise. Also, household income remained flat for the month of July. Until household income begins to rise again and job markets show signs of stability we do not anticipate any major rises in consumer spending.

U.S. GDP shrank 1% in 2Q09. Consensus forecasts had predicted a 1.5% decline so the better-than-expected reading provided bulls with more evidence that the recession is drawing to a close. Bears on the other hand emphasize that the economy is still shrinking and that we still have some work to do before we are out of the water.

New U.S. home sales surged 9.6% in July, rising for the fourth straight month and beating expectations. This is certainly good news for the housing market, as it was just recently in the midst of one of the worst downturns in history, but the federal tax credit that covers 10% of the home price, or up to $8,000 for first-time owners is certainly having a distorting effect.

The New York-based Conference Board announced Tuesday its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. Economists were caught flat footed as they had predicted a much more moderate rise to 47.5. This rise indicates that consumers are more bullish on the state of the economy than at any other point since the recession began. That being said, the minimum level associated with a healthy economy is 90 so we still have a lot of ground to make up.

Driven by renewed confidence in the global recovery stock markets worldwide continued to march upwards. Fed Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet, speaking at the annual central bankers’ symposium in Jackson Hole, Wyoming, said the world economy is pulling out of recession.

One area of concern that we have is the staggering debt level the U.S. government is taking on in the name of maintaining financial stability. While it is most certainly possible, perhaps even likely, that these unprecedented debt levels were necessary in order to avoid a repeat of the Great Depression the fact remains we are going to need to repay these debts somehow. The U.S. government plans to sell $109 billion of Treasuries in three days starting tomorrow, matching the previous record.

Sales of existing U.S. homes climbed 7.2% to a 5.24M annual rate, the most since August 2007. The gain was the biggest since records began in 1999. This jump was most likely a result of a combination of factors including foreclosure-driven declines in prices, government credits for first-time buyers and extremely low borrowing costs. Partially offsetting this good news is the fact that the median price fell 15%.

Economists were surprised by new figures showing U.S. initial jobless claims rose by 15,000 to 576,000. The rise is a result of companies continuing their cost cutting efforts despite some evidence that the economy is on a mend. Until job markets stabilize and employers begin to hire, rather than fire, any recovery in the economy will be on shaky footing. This is simply due to the fact that consumer spending accounts for about 2/3 of U.S. GDP and consumers are not going to open their wallets till they feel relatively confident they will have a job.

A Bloomberg survey of users on six continents showed confidence in the world economy surged to a 22-month high in August on signs the global recession is approaching an end.

The U.S. unemployment rate dropped in July for the first time since April 2008, data from the Labor Department showed this month. The Organization of Economic Cooperation and Development said today that the economies of its 30 members collectively stopped shrinking in the second quarter as Japan, France and Germany exited recession.

The MSCI World Index of 23 developed nations dropped 2.5% at 9:35AM today, representing the biggest retreat in six weeks. World markets dropped in response to the increasingly prevalent belief that the recent rally in equities has outpaced underlying economic growth. The dollar and yen both advanced as investors looked for safe-haven currencies.