If the current economic expansion lasts another year and a half, it will be the longest on record, even surpassing the expansion of the 1990s that ended in early 2001. Notice how we didn't say it'll be the "best" expansion of all-time, just the longest; it's not the best by a long shot. From the recession bottom to the expansion peak, real GDP expanded 39% in the 1980s and 43% in the 1990s. So far, eight years in, this one is only up 19%. That's why we've been calling it the Plow Horse Economy.… View More
North Korea. Charlottesville. Harvey. Irma. Maria. Despite all of the Trials and Tribulation of the last quarter - alternatively scary and sad, the three months just passed was yet another example of just how comfortable investors have become with being uncomfortable. The S&P was up +4% in the quarter, notching its 8th quarterly advance. The index’s average daily change during the period was a mere 0.3%, its lowest since 1968. Perhaps it’s a coincidence, but it appears that both bond yie… View More
Markets were mixed last week; small cap stocks gained while large cap stocks were essentially unchanged. Sectors which respond to economic growth, such as Energy, Industrials, and Financials, outperformed; conservative areas of the market, including many consumer stocks and Utilities, lagged. The performance variance reflects a “risk on” sentiment as investors view positively the prospects for tax reform and improving global economic conditions. Congressional leaders have promised to release… View More
Hurricanes Harvey and Irma weighed on the economy; but economic activity should rebound as rebuilding efforts begin.
Markets rose last week as Hurricane Irma caused less damage than feared and tax reform efforts took center stage. Prices for both U.S. Treasuries and gold fell following steady increases since early July; an apparent easing of geopolitical tensions with North Korea (notwithstanding Friday’s early morning launch of a missile over Japan) relaxed demand for these “safe haven” assets. The price of West Texas Intermediate crude, the North American benchmark, briefly surpassed $50 per barrel for… View More
We saw this commentary from one of the research analysts we follow. Brian Wesbury is the Chief economist at First Trust and we thought you might find his commentary interesting. This dovetails with the update we sent out last weekend about not believing everything you see or hear in the media. What Brian is discussing is the need to be honest about how and why the Federal Reserve grew its balance sheet. The Federal Reserve will finally look to start reducing its balance sheet and as it does, the… View More