This week, I reflected on the volume of conflicting data bombarding the American investor. To start, Linda Duessel, Sr. Vice President and Sr. Equity Strategist at Federated Hermes posted a comment titled “I’m a glass half full kind of girl”. Because of her profession, she kind of has to be, and we’ll get to that in a moment.
JP Morgan Chairman and CEO Jamie Dimon caused a stir lately when he spoke of a “hurricane” hitting the US economy. Now, Brian Wesbury, chief economist at First Trust, said in his Monday Morning Outlook “Dimon could possibly be right, but it’s far too soon. May’s jobs report confirmed that the US economy continues to grow. »* So, what gives? At least two things. Dimon is probably the most prominent senior executive in the world of global banking/financial services. Duessel is a stock market strategist and Wesbury is an economist. Put them all in a room together and you’d expect everyone to weigh differently – and the time frame being discussed would likely cause everyone to alter their opinions. Jamie Dimon is by far the most famous, so you can expect his thoughts to deservedly get the most airtime. Add Warren Buffett to the conversation and while they may all have different opinions, others will likely defer to him simply because he’s the oldest and wealthiest. Not to mention his “grandfather” attitude. Also remember that a broken clock is accurate twice a day, so just take a position and stick to it and he/she will be right at some point. If all of this were easy, everyone would be doing it – and the vast majority of investors wouldn’t lose so much money! Making smart investment choices takes a lot of work – a little luck really helps.
Now back to Linda Duessel’s comment this week on conflicting data and how it offers something for both optimists and pessimists. She cites specific data to support either position.
For the optimist: 1) The all-important Institute for Supply Management (ISM Report) for May surprised on the upside. This is one of the most significant indicators showing signs of strength in the economy, 2) May nonfarm payrolls showed the smallest gain in 13 months, a signal of some moderation in inflationary pressures , but strong underlying economic growth and 3) Evercore’s Investment Strategy and Research (ISI Report) showed trucking and homebuilder surveys cooled somewhat, but remained at low levels. students. Additionally, the Conference Board’s Consumer Confidence Index showed that consumer sentiment on business conditions has improved, although rising costs for cars, homes and major appliances have caused buyers to shift from purchasing big-ticket items to spending more on services.
Now for the pessimists: May’s Institute for Supply Management (ISM-Services), on the services side, disappointed with the smallest increase since February 2021 (I realize that sounds contradictory, but bear with me) . It is also a key indicator of the state of the US economy. 2) The US Energy Information Administration estimates refinery utilization to be around 90%. Difficult to increase this and if the Russia/Ukraine conflict drags on, we will probably see more supply problems (higher oil prices). It’s good for my oil and gas friends, but a headwind for the economy and 3) The Federal Reserve’s beige book, well read, contained additional evidence of a slowing economy – the difficulties labor market and supply chain disruptions being the most frequently cited culprits.**
So here is. You are free to feel very strongly either way. The issues cited above are just the tip of the iceberg of conflicting and conflicting information. Therefore, no matter how you choose to feel, I can provide fodder to affirm your belief. As for me, I’m going in with the glass half full and will continue to carefully seek out the best ideas from like-minded professionals and knowledgeable investors. It’s worked pretty well so far, and in my advancing years, I’m hesitant to change. I wish you good luck whatever opinion you may have on the future prospects of our investments.
The opinions, forecasts and views expressed herein are those of Tommy Williams and do not necessarily represent those of Williams Financial Advisors, Private Client Services, RFG Advisory, their employees or their clients.
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*Brian Wesbury, Chief Economist – First Trust Investments – Monday Morning Outlook Commentary of 06/06/2022
**Linda Duessel, Sr. Vice President and Sr. Equity Strategist-Federated Hermes-Weekly Commentary dated 06/03/2002