Economic Outlook Analysis
This outlook analyzes the key components of our economy (GDP, inflation, interest rates, and the consumer), and briefly reviews the global economy.
There are many cross currents in the market, most of these cross currents emanate from the economy and they are analyzed here.
Economists and their forecasts are notorious for not forecasting important turning points in the economy and financial markets, especially at the end of a cycle.
I’m often asked what indicators I analyze when I invest. I do have indicators that I look at for the economy. For investing, I use the valuations and the fundamentals of a company, and technical analysis to help determine entry and exit points.
This is the final research report on Trumponomics. All together there are six parts including this report.
President Trump believes that deregulation, lower taxes, and infrastructure spending will help the economy grow faster, and his economic agenda could help create millions of high paying jobs for his supporters.
Infrastructure spending could be the most important economic effort the Trump administration pursues.
Trumponomics Part 2 will analyze President Trump’s tax proposals. We don’t know what will be passed or when.
Most investors are not looking at the bearish case of these policies. I will write more about the bearish case as the bullish case is more than reflected in the markets.
Several years ago I issued a Special Report on the “New Normal”. I update that report to remind investors the headwinds that face this economy and the new administration. Below is an update of the “New Normal”.
The forecasts, estimates below are a consolidation from 2017 outlooks from Barron’s, WSJ, Fortune, BusinessWeek, CNBC, Wells Fargo, Charles Schwab, Merrill Lynch and our analysis of economic, business, and investment trends.
Most investment professionals such as myself try to invest in assets (stocks, bonds, commodities, real estate) that are undervalued, and wait for them to get to fair to overvalued and then liquidate. The problem for us value/fundamental investors is that most stocks and markets are currently overvalued, and this market is in the late stages of this economic and market cycle.
Major trends in the economy such as GDP, interest rates, CPI, retail sales, don’t change that much, especially month to month, but investment trends change much more often.
U.S. economic growth slowing, normal behavior this late in the economic cycle.
At the beginning of the year economists and analysts were concerned about:
This month I will focus on this economic cycle, U.S. interest rates here, and the global trend of negative interest rates.
Every year I do an economic and market forecast for our subscribers. This exercise is like looking at the variables one needs to look at for a business: what is the outlook for growth, what is the inflation and interest rate picture, how are our trading partners doing, what are the potential risks?