Macro Insight
  •  
August 05, 2019
Equity Market Commentary
 

Macro Insight

Equity Market Commentary

Equity Market Commentary

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August 05, 2019

 
 

The stock market focuses on the rate of change and is a forward predictor, anticipating the rate of change before it occurs.  With that in mind, the market may be telling us that the economy will be stronger in the future, not weaker. With a lack of news flow, August has been a historically painful month in terms of market volatility, and we should be prepared for the market to retest its early June low. Yet there are historic amounts of investor cash on the sidelines, and rarely does the market give so many what they want. Historic precedence implies that U.S. presidents get re-elected when the economy is strong, suggesting that measures will be taken for 2020 to be a year for strong economic growth, not a recession. With interest rates as low as they are now, stocks, stocks are cheap on a P/E basis and have room to head higher.  Andrew Slimmon makes the case that stocks are cheap and the market could be well above 3,000 by year end as it prices in the anticipation of a reacceleration in earnings growth in 2020.

 
andrew.slimmon
 
Head of Applied Equity Advisors Team
 
 

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