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April 25, 2005
U.S. Economy today, Mon., April 25, 2005, 7:39 AM
The U.S. economy is showing signs of a slowdown. If you have missed the signs, you ought to review the latest data for employment, retail sales, manufacturing production and housing.
Inflation in the U.S. is on the uptrend as seen by PPI/CPI/Beige Book data and the fact the U.S. Fed is continuing to raise rates, and will for many months to come.
This is a scenario that is referred to as stagflation. But rather than get into thinking about ambiguous concepts, let's just agree that the economic scenario present in the U.S., and most other countries today, reflects a difficult picture for future corporate earnings.
In order for the broad equity markets to move to higher levels, there must be a growing understanding or belief that economic output and corporate earnings will gain momentum " not lose it.
This is not to say that there are not excellent long-term values among certain stocks, but only a warning that it is a good time to continue protecting capital rather than trying to grow it.
Posted by Posted by Bill Cara on April 25, 2005 07:39:34 AM | Category: Economics
Just want to say thank you Bill for providing such valuable insight into the "true" workings of capital markets. One can go to lots of other places to get very detailed information on specific components of the markets, but nowhere else can they find rock solid information pulling it all together. Great job and thanks for making my personal investing life a little easier.
Posted by: jgalt at April 25, 2005 8:33 AM [link]