Despite all-time stock market highs, GDP forecasting models are projecting 4th quarter growth levels between .3% and .4%. This is sobering and conflicting news to Trump stating that the economy is booming. The stock market high is an inflated number, as investors are emptying their pockets after recent news of trade agreements between the U.S and China. To me this is rather alarming considering that there will not likely be a trade agreement in the near future.
https://www.cnn.com/2019/11/15/economy/economy-gdp-fourth-quarter/index.html
Have you seen the reports on decreased buying in the last few weeks? Many analysts believe these all time highs to be propped up and little organic buying is happening. Also that very few institutions are increasing equity positions in relation to other safer investments as smart money rotates into safe asset classes. These actions would signal you are right in your hesitancy of all time highs as growth is slowing and a trade deal is yet to be reached.
ReplyDeleteI read that the next round of tariffs to be slapped on China are December 15th. There's a possibility that these tariffs will ultimately not be implemented if trade talks continue. If this trade war is resolved by that time we should expect to see more growth and higher highs in the stock market.
ReplyDelete