In last week’s post, we discussed how the underlying components of Q4 U.S. GDP showed signs of weakness in the consumer and corporate area.  This week the Q4 GDP numbers were released for the Eurozone and Japan.  Q4 GDP in the Eurozone increased +0.059% from Q3.  That is an annualized rate of +0.24%.  Year-over-year, Q4...Read More

Since our last post, two of the more widely followed economic data points have been released, Q4 2019 GDP and the January 2020 Nonfarm Payroll Report.  Both had solid headline reports; US GDP grew 2.1% (annualized quarterly change) and nonfarm payrolls increased by 225,000.  Digging below the surface and examining the components of both reports...Read More

In May, we put together a list of market indicators to watch in order to gauge how investors were viewing the US-China trade negotiations.  Since the Phase I deal was recently signed, we thought it would be beneficial to revisit how these indicators have evolved since May.  While the economic indicators we follow suggest the...Read More

2019 was an impressive year for financial assets with major U.S. and international equity and fixed income indexes posting double digit returns. Source: Bloomberg. The key to success in 2019 in the equity markets was to be overweight technology related companies as the Information Technology and Communication Services industries were two of the three areas...Read More

The non-farm payroll report last week came in well above projected consensus estimates as private payrolls increased by 254,000.  This was received enthusiastically by investors and most commentators viewed the strong number as a sign that there is little chance of an economic recession in the near term.  Putting aside the high variability of any...Read More

The current U.S. economic recovery is often noted for being the longest ever in terms of time duration.  It is less often noted that it is also one of the weakest in terms of average annual growth rate and total output.  This has occurred alongside record low interest rates in the U.S. and globally, and...Read More

In several prior posts, we have highlighted that the consumer has been the source of near-term strength in the U.S. economy, but we believe the long-term potential of the consumer is generally tied to a rebound in the corporate sector.  If the corporate sector remains weak, there is a potential risk that layoffs may increase,...Read More

The third quarter GDP report was another reminder that the consumer continues to be the main source of positive economic growth in the U.S.  GDP growth in the third quarter was 1.9% annualized, the exact contribution from Personal Consumer Expenditures.  Private nonresidential investment (capex) declined by 3% annualized and detracted from GDP growth for the...Read More

As mentioned in prior posts, the consumer segments of the economy have been generally performing better than the corporate segments.  This pattern will likely persist if corporations continue to generate the profits required to support their current payrolls.  S&P 500 earnings per share growth was negative on a year-over-year basis in Q1 and Q2 of...Read More

The FOMC has voted to lower rates twice this year. Some market commentators have suggested that this move to a more accommodative stance is an indication that economic growth and market performance should improve. Historical analysis suggests that it depends on how accommodative the FOMC has to be.Read More