It’s tough sledding in the market today, and even growth names that have exhibited resolve are starting to slip. I think there are a number of issues at play. The sobering reality maybe the economy is not as strong as expected. This is not a surprise to me, as the data has been clear.
Bond yields and the yield curve are both suggesting we should stop talking about transitory inflation and focus on flattening economic growth.
Take a look at this morning's ISM Services report, which was a big miss.
June ISM Services | June | May |
Headline | 60.1 | 64.0 |
Business Activity | 60.4 | 66.2 |
New Orders | 62.1 | 63.9 |
Prices | 79.5 | 80.6 |
Employment | 49.3 | 55.3 |
To see the chart, click here.
I think it’s best not to panic, because there are other issues that have nothing to do with fundamentals, including:
- Anxiety over the next catalyst
- Efforts to bring back harsh economic and personal freedom restrictions
- Bracing for earning season - which will be amazing
- Bracing for tomorrow's FOMC minutes
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