Building on the previous week’s good news, the economic statistics released last week showed continued improvement.

I got an e-mail from a reader the other day that really bothered me. A former investigative journalist worried about where the world was heading, she sent me a list of concerns, backed up with citations from more or less reputable sources.

The concerns themselves were nothing unusual—the U.S. debt and deficit, America’s position in the world, the status of the dollar. What struck me was the writer’s absolute conviction that the entire financial/economic system is broken.

Over the past month, we saw a market recovery that seemed like it would lead to new highs, a pullback on Greece and China, another recovery, then another pullback, and then a bounce up followed by another pullback on the Chinese devaluation.

What’s going on here?

The shocks from the Chinese yuan devaluation continue to echo around the world.

Today, the currency had its second-worst day (after yesterday) since the modern Chinese foreign exchange system launched in 1994, falling a further 1.6 percent against the dollar. Markets were down around the world, and U.S. interest rates dropped substantially.

Some mornings I wake up and wonder what I should blog about. Not today. Looking at my phone in bed to scan the headlines, I couldn’t believe the news—China had devalued its currency! This is a big deal in the financial world.

Last week was a good one for the economy. The data released met expectations and, in many cases, substantially exceeded them. Overall, accelerating growth seems likely in the second half of the year, and first-half growth may turn out better than the initial reports suggested. 

Over the past couple of weeks, I’ve written about various headwinds the economy faces—among them, slow wage growth, a decline in consumer confidence, slow consumer spending growth, and declining business investment. All of these are real issues, and ones that have held the economy back over the past quarter.

At the same time, there’s been encouraging news this past week that suggests the slowdown, as last year, was temporary, and that faster growth is ahead.

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead.

For the first time in a while, there have been significant changes in two indicators—one encouraging and one more worrisome—but overall, conditions remain favorable.

In my latest Market Thoughts video, I discuss the U.S. and developed markets' recent bounce back after a difficult June. I also provide an update on U.S. economic performance, highlighting positive developments in the labor market.

Back in February, I looked at U.S. market valuations based on several different metrics, concluding that valuations were quite high—at or above the levels that prevailed before major corrections.