Is the US already in recession? Probably not. But in the first quarter, real GDP is very likely to have a minus sign in front of it. Yes, a negative reading for real growth! Even before Friday there were some troubling signs. Retail sales fell 0.9% in January while housing starts dropped 9.8%. The personal saving rate hit a new post-COVID low in the fourth quarter, existing home sales declined 4.9% for the month and, with pending home sales (contracts on existing homes) down, February will like… View More
Global financial markets have hit a rough patch as the cumulative impact of President Trump’s trade and related economic threats are fueling concerns that he will diverge from the pro-growth script that he initially followed during his first term. Then, the positive economic elements arrived first, primarily tax cuts, before the negative actions followed, i.e., a brief trade war. These negative actions caused a downturn in global trade and slowed the U.S. economy and corporate profits. The U.… View More
We don’t want to over-emphasize the importance of one data point, but the data over the last several months suggest that the progress toward the Fed’s much-vaunted goal of 2% inflation has slowed. In truth, the 2% target is a widely agreed-upon fiction among both policymakers and market participants themselves borne out of a New Zealand central bank paper from the late 1980s. Ironically, the target was only invoked when inflation was serially below 2% in the aftermath of the GFC. Since the … View More
There is nothing easy about forecasting financial markets, and when combined with a President who changes his mind in a matter of moments on policies that may a have lasting impact on sectors, industries, or specific companies, it becomes that much more challenging. Three weeks into Trump 2.0 we felt it was as good a time as any to review our sector recommendations. We feel being overweight the Financials, Industrials, Utilities and Energy sectors remains a prudent strategy. The deregulation st… View More
With the fourth quarter reporting season more than 60% reported, both earnings and sales growth have been quite strong. EPS growth is expected to be 14.8%, with 9 of the 11 sectors exceeding estimates from the start of the quarter. Sales growth is also expected to be strong overall with estimates sitting at 4.8%, with 9 of 11 sectors currently exceeding estimates from the beginning of the reporting season. While there is still 40% of the index left to report, there are few that could really swa… View More