The Endless Debt Threat has been going on for thirty years! Bottom line is we don’t see anything about the current level of debt that’s going to cause a recession anytime soon.
Dow 28,750 / S&P 500 3,100.
Yes, this is likely to be one of the most optimistic forecasts you see, if not the most optimistic one of all. But, in the end, we do best by our readers when we tell them exactly what we think is going to happen, without altering our projections so we can run with the safety of the herd. Grit your teeth if you have to; those who stay invested in the year ahead should earn substantial rewards.
New Narrative Alert: Fed Chief Jerome Powell is to blame for the volatility in stocks. We think the news that really drove the market higher last week was the report that economy-wide pre-tax corporate profits were up 10.3% from a year ago (and up 19.4% after taxes – thank you tax cuts!). Focus on fundamentals, not post-event explanations.
Consumers Stay Strong. Look, you could spin this data any way you like, but instead of getting bogged down in the day-to-day figures, we like to focus on fundamentals, and those fundamentals are very strong. Total retail sales are likely to be up 6%+ this year over last year. That’s very strong.