Weekly Talking Points7/31/2017

Investment & Economic Talking points

  1. Composite PMI rose to 54.2 signaling continued strength here in the US. (Above 50 is expansion, below is contraction).
  2. Existing home sales fell slightly to 5.52k and new home sales were steady at 610k. More of the same, which at this point in the cycle should be considered just fine.
  3. Durable goods orders were up 6.5% – this is one of the leading indicators we track and this is a very good number.
  4. Q2 GDP came in at 2.6%, twice as fast as Q1. This is typical, as Q1 has a tendency to “lag” due to some informational and seasonal inefficiencies. Unfortunately, six of the past seven quarters were revised down, leaving the average growth since 2009 at 2.1%.
  5. The best news from the GDP report was that each part of business investment – equipment, construction and intellectual property – were all positive for the 2nd quarter in a row. According to First Trust, this signals greater business optimism and if sustained may lead to greater productivity and economic growth.
  6. Between tepid growth, and Washington’s inability to repeal any of the ACA tax or present ANY tax reform, wages are likely to remain stagnant. This may cause us to reevaluate our commodities and inflation thesis however we need more data before making any decisions.

Bottom line

Despite Amazons earnings miss last week this has been a strong earnings season so far. Our main concern coming into this earnings season was forward guidance but so far most companies are still relatively optimistic about the rest of the year.

About the Author
Joel Faircloth

Joel Faircloth

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Joel Faircloth has built his career through formal education, working for some of the top firms in the country, and by challenging convention. He brings an extensive breadth and depth of experience in the financial services industry and has worn many hats—operations, client service, compliance, trader, marketer, writer, trainer, and investment manager. Joel is a seasoned investment manager, strategist and leader. He believes in the idea that one person or a group of like-minded people can help change an industry, and this is what led him to Aspen Wealth Strategies.

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