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Three for Three—An Economic Hat Trick - November 4, 2019

Three big economic events landed at the feet of investors last week. For all practical purposes, they were favorable.

Let’s start with the preliminary number from Q3’s GDP report. GDP is the broadest measure of economic activity.

U.S. GDP slowed from Q2’s annualized pace of 2.0% to 1.9%, topping the consensus forecast of 1.6% (U.S. BEA, Wall Street Journal). As we saw with Q2, the consumer led the charge as spending by businesses remained soft.

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Three and Done - October 30, 2019

The Federal Reserve concludes its two-day meeting on Wednesday. There is a 97% chance of a ¼% reduction in the fed funds rate to 1.50-1.75%, according to the CME group.

  • The Fed is unlikely to upend expectations. Expect a rate cut.

It will be the third reduction since July. But is this the last cut in the cycle—three and done?

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Savings Rate Rises as Americans Save More - October 28, 2019

Here’s a surprising fact—Americans are saving more. Why is it so surprising? Because, for years we’ve heard that Americans don’t save enough. We’ve heard that the savings rate is too low. That is no longer the case. The shift is highlighted by the graphic below.

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Housing’s Firmer Foundation - October 21, 2019

Housing has been in a mild recession over the last two years, with residential construction falling in eight of the last nine quarters (U.S. BEA data). New home sales and existing home sales have also been soft. But housing appears to be turning a corner.

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