The Economy: Santa or The Grinch? Depends where you are and what you're focused on. US economic numbers remain strong with some softening at the periphery. Global numbers are less robust with China slowing, Brexit stumbling, France rioting and Russia threatening. The Fed has been pounded into discovering that interest rates are at neutral. Oil has been pounded 33% into discovering a new price at $50/barrel. Gold, fixed income and real estate have likewise seen declines. Yet surveys of consumer and business confidence remain strong. From sales projections to profit expectations to staffing needs, businesses are seeing good times ahead. Increased deficit spending, tax cuts and profit repatriation have all contributed to good numbers and the sense that the upswing will continue. This begs the question, "Which comes first, a business slowdown or a bear market in stocks?" The record shows that sometime it's one; sometimes it's the other. The drumbeat of falling sales, profitability and layoffs can quickly change consumer sentiment. A stock market crash can have the same affect even more quickly. With Boomers retiring in record numbers, rest assured that this demographic will continue to impact the economy as it has since 1946. Boomers needing to monetize their home equity should result in an eventual selloff in residential real estate. Boomers needing to restructure retirement accounts out of stocks should have a similar affect on the stock market. But, of course, that's assuming rational cause and affect markets … and the one thing we've all learned in the past decade is that assuming anything rational could be fatal. Instead, Be Nimble Be Quick. |