INSIGHTS
JAN
20
WEEK AHEAD...
Out with the old, in with…Old. The president will be sworn in for his second term on appropriately enough, Rev. Martin Luther King’s Birthday holiday. Symbolic indeed. The President once again has his hands full with the uncertainty in the economy, the reticence of Congress to reduce spending and a World that is in as much turmoil as we have seen in years. Navigating all of this will take the ability to compromise, the ability to coerce, the ability to make things happen. Stagnation will be unacceptable and will ultimately hurt the rich, middle class and poor. We just hope and pray that all of the politicians in Washington will begin to think about what’s best for the country as a whole, not just some vested interest.
We can only hope.
The US Debt Ceiling will be raised to allow the government to function for another three months and we are pretty sure that that should be enough time to figure out what is actually needed. Pain is our future, we just wonder how much.
The markets are not afraid of this pain scenario. Earnings (as we thought they would) have come in better than expected and investors are reassessing the risk of owning equities as opposed to the low rate of return they are receiving from bonds. We are still strongly in the equity corner and do see the US economy expanding by anywhere from 2.8% to 3.5% this year. Not gangbusters but it is growth.
Existing Home sales will be out early this week and we firmly believe that there will be improvement. We lean towards the higher end of the consensus (5 Million to 5.2 million). If we are right, the market will react positively.
Redbook numbers will be out also. Won’t be a positive surprise here. Retail sales have not been knocking anyone dead and we don’t see that changing for the next few months. Luckily, we may skirt a really hard winter and that should help these numbers in the spring.
The most telling set of data will be Jobless Claims. We believe we will start seeing the number average below 330,000 for the foreseeable future and this can only help with growth come spring.
We can only hope.
The US Debt Ceiling will be raised to allow the government to function for another three months and we are pretty sure that that should be enough time to figure out what is actually needed. Pain is our future, we just wonder how much.
The markets are not afraid of this pain scenario. Earnings (as we thought they would) have come in better than expected and investors are reassessing the risk of owning equities as opposed to the low rate of return they are receiving from bonds. We are still strongly in the equity corner and do see the US economy expanding by anywhere from 2.8% to 3.5% this year. Not gangbusters but it is growth.
Existing Home sales will be out early this week and we firmly believe that there will be improvement. We lean towards the higher end of the consensus (5 Million to 5.2 million). If we are right, the market will react positively.
Redbook numbers will be out also. Won’t be a positive surprise here. Retail sales have not been knocking anyone dead and we don’t see that changing for the next few months. Luckily, we may skirt a really hard winter and that should help these numbers in the spring.
The most telling set of data will be Jobless Claims. We believe we will start seeing the number average below 330,000 for the foreseeable future and this can only help with growth come spring.