Sonders: 6 Signs That Point to a Bullish Inflection Point
Liz Ann Sonders of Schwab says we’re at an inflection point in the US economy. That’s right. She says we’ve missed the recession entirely, diverged from Europe and are now in an environment that reminds here of 1998. She offers 6 supporting points for her bullish thesis:
But supportive of a better jobs outlook have been several notable economic readings:
- The aforementioned improvement in the jobs picture
- The bounce in both the manufacturing and non-manufacturing ISM indices (in the case of the former, back above the 50 contraction/expansion line, after three months below it)
- The bounce in consumer confidence and sentiment readings
- Strong retail sales (even excluding gasoline), along with positive revisions to prior months
- Much better housing data, including a five-year low in foreclosure filings
- The 14th consecutive week of improvement in ECRI’s weekly leading index
Read the full report here.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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10 Comments
http://blog.yardeni.com/2012/10/weekly-economic-indicators.html
the recession debate basically boils down to this: will the housing recovery be strong enough to counter the global slowdown and fiscal cliff?
considering even goldman’s base scenerio includes a respectable fiscal drag, and bipartisanship can make it worse, it will take a very strong effect from housing to counter it.
whatever the us growth is in 2013, from a market perspective one has to ask whether the growth will be enough to maintain multiples achieved with top margins (reminder: profits are directly related to deficit spending by accounting identity) when revenue growth seems to disappear (IBM, Intel, FedEx as a case in point). my best bet is meager to no growth with a profit recession.
I think the Bears are dead. Seems like the market can only go up! Next move will be for normalizing of P/E’s at 18. The herd is right this time.
Schwab’s trading volume dropped 19% from a year ago……..
The open-ended monthly purchase of $40B in MBS will result in tenants everywhere realizing that they can own for far less than they can rent. Many will not qualify – and standards will be loosened to address that issue.
The result will be a force-fed housing (and personal wealth) recovery that will support further market gains.
The Feds intervention here will be far more meaningful to individuals than appreciated at present. This form of QE will take far longer to be effective but its effect will be much more pervasive than the earlier QE efforts.
Is it okay for me to say that I think Sonders is kind of hot?
She’s absolutely hot! Yes, it’s OK.
When the Anti-Obama crowd realize that he has four more years they to save their political jobs will bring cooperation to the fore and better times will be realized by all starting on Nov. 6tn.
It’s an interesting perspective. I’ve heard much of both sides and all I can say is “we will see soon”. I’m not much of a fundamentalist, I’m more of a chart reader and the pattern of the past few years looks corrective. I currently have this labeled as an a,b,c corrective wave, but we are near the inflection point. If the fore mentioned fundamentals hold this could just as easily be the start of something much bigger.
Finally the naysayers of Obamanomics seem to be throwing in the towel. Bernanke’s roundabout expansionary policies are finally showing effect since 2Q helped by amazing energy economies for corporates — and non-inflationary despite even Bernanke’s worst fears. US economists would do well to remember that the huge tectonic shifts in technology over last 2 decades has consequently altered the production functions at both macro and micro levels. They need to research these variables. My gut economic sense tells me that they will find housing is no longer a leading indicator at all — despite being a large employer segment. Even employment will be driven by new technologies in communications, energy, bio-genetics, IT, etc. Therefore if there were bipartisan support to the education and retraining plan put forward by Barack & Democrats, at least we middle-Americans will all be better prepared for the next recession to be brought in by the war-budgets of future neo-con Republican administrations after 2016.