Weekly Commentary

It is difficult to digest the mixed signals the economy is putting out in this current –and certainly unique– economic cycle while also remembering the investment game you are playing. Let’s start with the Federal Reserve: Chair Powell effectively acquiesced and removed his standing language that inflation would be transitory. 1 “We tend to use […]

Last week’s blog post focused on a strange dichotomy for the U.S. Consumer; their frustrations juxtaposed with their willingness to spend. I spend a tremendous amount of time focused on the U.S. consumer not just from a domestic macroeconomic perspective, but global. The United States represents 24.4% of global GDP. [1] The U.S. consumer represents […]

One of my key performance indicators for corporate earnings and U.S. GDP growth is the consumer. However, you do the math: without U.S. consumer spending, we would fast approach a growth cliff. Consumption is about 70% of the U.S. economy. Only on the margins can the government or fixed investment make up some ground when […]

I have been getting a lot of curious reactions to my view that inflation is transitory as I’m sure the Federal Reserve is as well. After all, last week inflation was reported at a 30-year high of 6.2% on a year-over-year basis. [i] Inflation is such a significant concern; consumer confidence is starting to erode. […]

As we wrote in our September 7 blog post, Soft Patch, job growth came to a screeching halt in August. Last week’s GDP report showed the U.S. economy slow dramatically in Q3. It was going to take some lifting of wages and jobs to get us over the economic hurdles of the last few months. […]

Economic soft spots are showing up across the globe in third quarter GDP reports. China reported Q3 GDP growth of 4.9% year-over-year (0.8% annual rate). [i] The European Union experienced similar weakness in Q3 with collective GDP growth of 2.2% on a year-over-year basis. [ii] United States Q3 GDP came in at an anemic 2% […]

Supply chain disruptions have remained near record-high levels for the last five months. Those disruptions partially reflect congestion at U.S. ports, to which the media has increasingly called attention. A specific focus has been on the number of vessels anchored outside of the ports of Los Angeles and Long Beach. However, the backlog of ships […]

Global supply chain challenges combined with a constrained labor supply have many worrying about stagflation – the combination of economic stagnation and inflation. People are fearing that we’re headed into this type of economy where inflation is rampant yet, the economy is not growing. The weak historical performance of equities in stagflationary environments helps explain […]

Third quarter earnings season is upon us and perhaps it is time to take stock of what to expect. There is a lot of noise that makes it hard for investors to separate the “wheat from the chaff.” One thing is certain, earnings season has mattered most during the pandemic. According to Bloomberg, the equity […]

We just published our Q4 2021 Look Ahead, you can view the presentation here or watch our narrated version here. Jobs + Wages = ConsumersWe expect wages and jobs to drive consumer behavior in the fourth quarter. Rising wages, especially in the lower-wage service sector, are continuing to put more firepower in the hands of […]