Our underlying thesis the current market and economic environment is similar to the post 2011-12 and 2015-16 mini-recession driven bear markets was reinforced by the better than expected GDP, weekly Employment, and Capital Spending data this morning.  While the numbers shouldn’t be considered strong, they certainly do not suggest the economic slowdown is worsening.  The first sign of better growth is when it gets “less bad” first.  Again, we don’t take too much stock in one reading because they get so significantly revised, but all the data today was better than consensus expectations:

  • Q3/19 GDP was revised up 0.2% to 2.1% quarterly annualized growth
  • October Durable Goods ex-transportation was up 0.6% vs. consensus expectations of up 0.1%
  • Weekly Initial Unemployment Claims came down despite fear among economists of a trend of increased claims.

Then fundamental backdrop reinforced by the better data trend coupled with a dovish Fed gives us comfort in our 2020 S&P 500 (SPX) target of 3350, but the tactical data suggests waiting for a brief correction prior to adding exposure.

Have a very Happy and SAFE Thanksgiving.  Tony


Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expensesAll data points are sourced from Bloomberg as of 11/27/19 unless noted otherwise.

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