Could someone help to explain to me…
You have a GDP number for Q1 out of the USA less than 1%, should be negative had they used a deflator number more in line with this real rate of inflation.
ISM and other manufacturing numbers are holding on for dear life above 50, below that signals recession in those areas. Services is also trending very close to the 50 level
Jobs numbers have been quite lack lustre, with minimal months above 200k, I think mid 150’s is the number needed to keep up with population growth.
The most recent print at 38k, the lowest in 6 years.
Then you have all of the cyclical elements coming together, that this is the longest bull run in history and that cycles that have been in place for hundreds of years points towards the end and perhaps a cycle move lower.
Then you have the threat of interest rate rises, increase in borrowing costs and therefore weaker equity markets.
Finally, we just went through something like the 6th consecutive quarter of corporate earnings declines…yes…..earnings/profitability and revenue generation for the corporate America declined yet again.
I haven’t run over the numbers, but surely at these levels, P/E ratios are breaking all sorts of Guinness records for the over valuation metrics.
In light of all of the above and I would assume many many more data topics that suggest a negative environment for equities in the USA.
Yet here we are today, with the USA 500 and USA 50 teetering on the line of record highs never before seen.
For those that might say the environment remains accommodative, well it doesn’t matter anymore as the market has been slightly changing course to price in rate rises and by now, markets understand QE doesn’t work. Its failing in Europe, has failed in Japan already.
(20min delay)
