The Market, She is Always Leading Us...
If you ask Mel, First Affirmative's CFA and economic analyst (he pens the quarterly pieces clients read) here is what he thinks about were we are. If ever there was confirmation that we truly are in the 9th Inning of Investment Cycles, Mel confirms it:
"First quarter’s GDP revision was .1% lower than the initial release. First Quarter GDP now is estimated at 3.1% and is subject to one more review. The consensus called for a revision to 3%.
Not only was GDP lowered slightly, but inflation pressures also were adjusted from an initial .9% to .8%. Core PCE remained subdued, rising less than forecast.
In another sign of a slowdown, pending home sales projected to increase .5% for the month actually declined by 1.5%.
While GDP for the quarter was up 3.1%, final sales (this measurer eliminates inventories) for the quarter increased only 1.30% and is a “truer” measurer of the current state of the economy in a trade war scenario. Inventories received a boost as importers rushed to avoid an increase in tariffs.
The stock and bond market lately reflect the concern of a slowing economic landscape. The consensus forecast for second-quarter GDP is 2% down from first-quarter 3.1%.
I don't know how it is so smart, but the Market is always telling us what the future, 6 months out, will bring. We need to never forget that.