We’ve had 89 months of economic expansion.
- The average U.S. economic cycle lasts 59 months before recession.
- We are 30 months past that.
- … and the market just hit an all-time high
What comes next?
Below is a compendium of links to what we've been saying recently:
- U.S. Economy: ‘Not Rainbows & Puppy Dogs’ But ‘Less Horrible’
-
U.S. Growth Is Accelerating (For Now) ... Don't Fight The Data
In short, we've been arguing that over the near term U.S. growth will accelerate modestly from 1.5% (on a year-over-year basis) in the third quarter to 1.7% in the fourth quarter. (Note: That remains below the peak of 3.3% hit in March of 2015.)
The market is currently pricing in a rapid acceleration that suggests U.S. growth bottomed earlier this year. Consider the following (performance since June 30th):
- Industrials (XLI): +13.8%
- Utilities (XLU): -8.2%
- 10-year Treasury Yield: at 2.36% today versus a low of 1.32% in July
We're skeptical that growth has put in its cycle low and, with the Fed raising rates and stocks at all-time highs, there are a lot of underappreciated risks. The chart above supports our skepticism.
But what do you think? Cast your vote in today's Poll of the Day, "Would A Fed Rate Hike Cause A Stock Selloff?" and join the dialogue with us on Twitter.
We look forward to hearing from you.
