Economic Optimism in Order

Despite the fact that U.S. consumer sentiment has dropped and business activity seems to be slowing, a “period of sluggish growth looks more likely than an outright recession,” according to a recent article in The New York Times. “Even as the risk of recession has clearly increased in the last several weeks, there are also sources of resilience that have every chance of proving powerful enough to keep the decade-long expansion going.” The article outlines… Read More

GMO’s Montier on the Dual Economy

A Financial Times article offers an in-depth discussion of GMO’s James Montier’s thesis that the U.S. is moving into a “dual economy where productivity growth is reasonable in some sectors, and totally absent in others.” The article explains that the push by corporate America to make profits has been “replaced with the desire to achieve growth at any cost,” and this often involves using loss-leading strategies where products or services are offered free of charge… Read More

Larry Jeddeloh: New Era for Markets is Here

A Barron’s article from August outlines an interview with Larry Jeddeloh, founder of the Institutional Strategist newsletter and the research firm TIS Group, in which he shared insights regarding the risks and opportunities in what he sees as a “new era” for the financial markets. Here are some highlights: According to Jeddeloh, the Trump administration’s national defense strategy is “driving economic and trade policy. This is new.” He added that this poses significant risk to… Read More

Ed Yardeni Weighs in On Investing

In a recent episode of WealthTrack, Consuelo Mack interviewed economist and strategist Ed Yardeni, President of Yardeni Research, and asked him about the metrics he thinks are important for investors to stay tuned into. News events are constantly barraging us, says Yardeni, adding, “part of the trick is figuring out which ones are noise and which ones are signal, which ones really matter, and which ones don’t.” He advises against allowing emotions or political news to… Read More

Lessons Learned from a Decade of Market Expansion

In a recent Barron’s article, Bessemer Trust Chief Investment Officer Rebecca Patterson shares insights regarding the economic expansion that has occurred over the last ten years, “seeking to uncover lessons that can help us to anticipate risks and opportunities ahead.” Here are some highlights: Peaks can be further away than you think. “Barring some shock” writes Patterson, “the economy for now doesn’t look at risk of imminent recession, though we continue to believe we are… Read More

Stocks that Could Benefit from the High Price of Raising Kids

A new report from the U.S. Department of Agriculture found that married, middle-income parents will spend $233,610  to raise a child born in 2015 from infancy to adulthood, a figure 3% higher than the prior year, writes Validea CEO John Reese in last week’s Forbes. Using his guru-inspired stock screening models, Reese identifies five high-scoring stocks (representing a range of spending categories), that could see some upside from the high price-tag: Procter & Gamble (PG)… Read More

Harvard Professor’s View of a Sick Economy

If you were to view the current economic situation through the lens of a medical doctor, you might see that the patient’s illness fails to offer an obvious diagnosis. At least that’s the view that N. Gregory Mankiw, professor of Economics at Harvard University, describes in last week’s New York Times. He writes that if you had to choose one statistic to gauge an economy’s health, it would be total (inflation-adjusted) income produced within an… Read More

Doll on the Markets Positives and Negatives on Today’s Market

In a recent Barron’s article, Nuveen Asset Management’s Chief Equity Strategist Bob Doll says that, despite disappointing first quarter results and apparent earnings struggles, consumer spending will be a healthy tailwind for the economy as a whole. He offers contrasting views of the current market situation:   Positive: Equity valuations don’t appear to be stretched; Earnings improvements should materialize in the coming quarters; The tumult in the oil market appears to be over; Investor sentiment… Read More

Technology and a Decline in Economic Growth

Stony Brook finance professor Noah Smith briefly critiques Northwestern University professor Robert Gordon’s argument that “the golden days of growth are over” in a recent BloombergView post. Smith summarizes Gordon’s recent book as arguing that a few key technological inventions catapulted growth from 1870 to 1970, but that the low-hanging fruit is now gone and so growth has necessarily slowed. Smith makes two arguments and one additional background point in response. The background point is… Read More