Higgins Capital Management, Inc.

Rising Market or Recession

The Economy: Construction Spending is up, ISM is up; best quarterly stock market returns in 2-decades. We're entering 1st quarter earnings reports. Where's The Recession … Where Is The Recession? The US expansion continues unabated. But economic data remains mixed as it has for the past 10-years. Central Banks remain active in manipulating numbers, liquidity and asset bubbles. Everything is politicized and weaponized; right down to whether or not your children eat Hostess donuts. … and some moron out there is going to have an opinion about your children and feel entitled or compelled to voice it. This is the world we inhabit. Nothing has changed. Confused? Try this: Mohamed El-Erian, Chief Economic Adviser at Allianz says, “There’s no way there’s going to be a recession.” He sees momentum in the economy with business investment picking up and the labor market strong. On the contrary, Wolf Richter sees red flags with steady slowing in the economy. He sees unsold goods piling up in U.S. warehouses as shoppers close their wallets. He sees retail as the weak link in our consumer based economy. How can Big Data and transparency reach such opposite conclusions? Remember being young, confused and picking daisy petals, "She loves me. She loves me not." The more things change … and you're not alone. Most investors are worried sick.

Food for Thought: There's always a Bull Market somewhere! We are eternally optimistic … because we put enormous effort into planning for the future. We see opportunity flowering as the financial markets continue their endless gyrations. What makes us different is that we'll give you the unvarnished truth. Our advice has been consistent: Keep your powder dry, opportunity is here but it's a matter of timing. Create a new plan. Build a revitalized portfolio that will survive the next crash. We see a reset coming as systemic stresses seek resolution. What this new era will be called is still to be determined. For now, we see the end of the 70-year post WWII era. Where ever we look, we see change coming as long established socio-political-economic-environmental trends break themselves on the rocks of indifference. Bretton Woods with fiat currencies, dead. Paris Climate Agreement with China's unprecedented pollution, dead.  NATO with Poland and overtures to Brazil, dead. Central Banks with their incompetence, dead. Alternative energy without subsidies, dead. Endless entitlements with endless debt, dead. Globalism with China's Silk Road, dead. Unbridled U.S. military dominance, dead. Unopposed rise of Islam, dead. Demise of the Occident, dead. The list goes on. The point is that we are at historic levels of instability and intolerance. So the question becomes, "What are you doing to protect yourself while preparing for the future?" The new age will bring unrivaled wealth to those prepared to embrace it.  But it will require a new approach. Contact us.