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The Economy Takes a Victory Lap - July 30, 2018

The U.S. BEA reported Q2 Gross Domestic Product (GDP) expanded at an annual pace of 4.1%. It’s the best quarter in nearly four years, and it was fueled by a rebound in consumer spending, a jump in exports, and solid business investment.

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Q2 GDP Preview – Guns a Blazin’ - July 25, 2018

Q2 Gross Domestic Product (GDP), which is the largest measure of goods and services for the economy, will be released Friday.

  • The Atlanta Fed’s GDPNow model estimates growth of 4.5%. It would be the best reading since 2014 (U.S. BEA).

  • Friday’s report is an early read and is subject to revisions.

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A Stealth Rally – No Respect - July 23, 2018

Do you want to wallow in negativity? It’s easy. A PC and a couple of keystrokes will provide you with access to any number of news sites. While some financial sites may be more balanced, highlighting strong corporate profit growth and the economy, you won’t have to look very long before you run into stories about the escalating trade war and threats of new tariffs.

But look what’s happened to the stock market recently. The S&P 500 Index, which is comprised of 500-large American companies, is up nearly 9% from its February 8 and April 2 lows – see Figure 1.

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Q2 Earnings Season Off to a Fast Start - July 18, 2018

Q2 earnings season is underway, and analysts are expecting strong numbers.

The early read is encouraging.

  • With 8% of S&P 5002 companies having reported (as of July 16), S&P 500 profits are expected to rise 21.2% vs one year ago (Thomson Reuters I/B/E/S).

  • 85% of companies, which have reported Q2 profits, have beaten analyst forecasts.

  • The cut in the corporate tax rate, coupled with strong U.S. economic growth, is aiding results.

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Should We Fear the Curve - July 16, 2018

The yield curve has turned into the flavor of the month. A quick look at Google Trends shows a significant increase in recent searches for the term, which brings us to two important questions: What is the yield curve? And why has it been thrust into the financial headlines?

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