Executive Summary:
With recent economic releases on the weak side, why have stock investors been taking the bad news in stride and pushing the S&P 500 ever higher? Dr Ed examines this question, offering four possible explanations: Investors expect the Fed to ease in September, although we’re not totally convinced the Fed will—or should. Recession fears have receded, helping to justify higher valuations. Productivity rebounded during Q2, and subdued unit labor cost increases helped to contain inflation. Finally, the Digital Revolution will continue to drive economic growth—supporting our Roaring 2020s scenario.
Strategy: Another Good Week for Stocks
The economic news has been weaker than expected since Friday, August 1, when July payrolls rose by only 73,000. Even more disturbing was that May’s gain was revised down from 144,000 to 19,000, and June’s increase was revised down from
Big Tech earnings week is here! Stay ahead with MacroMicro’s Economic Calendar — track CPI, GDP, and key earnings like Apple & Google all in one place. Check it out »
