US equities (^DJI,^GSPC, ^IXIC) are posting their strongest positive reaction to retail sales data in six months as the July print indicated strength in consumer spending. Edward Jones senior investment strategist Angelo Kourkafas joins Catalysts to break down the print and whether investors can expect a looming recession.

Kourkafas notes that the decline in initial jobless claims, alongside the strong retail sales report, was "exactly what was needed to put some of the recession fears to bed." He argues that these data points highlight a resilient consumer as inflation eases to the Federal Reserve's 2% target, ultimately creating a "recipe for a soft landing."

While some investors are still wary of a recession, Kourkafas explains that the economy is slowing, but still growing: "That's a very important distinction. We're not talking about a contraction, as was the fear after the last jobs report. The economy continues to add jobs and real earnings are positive after inflation. They have been for the last 14 months. Plus, we have lending conditions that are easing while at the same time, the Federal Reserve is about to embark on a multiyear rate-cutting cycle."

While the economy slows, it does not mean a recession is on the horizon, and he argues that pullbacks can be viewed within "the confines of an ongoing bull market."

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This post was written by Melanie Riehl