This week, CEO Eric Boyce, CFA discusses: 1. Discussion of Leading economic indicators - negative trends last few years, but coincident indicators continue to move higher 2. Strong relative performance from gold - still viable as a diversification tool 3. money market balances still rising ($7.7 trillion) - lots of market liquidity available 4. infrastructure spending driven by AI, especially in the US - spending likely to continue for several years 5. tariff revenue now 18% of household income tax receipts 6. consumer spending trending down, earnings estimate growth largely driven by Mag 7, tech stocks
This week, CEO Eric Boyce, CFA discusses: 1. labor market is losing some steam, especially in tariff-impacted sectors; job growth falling short of breakeven 2. downside risk to payroll growth, unemployment next few months 3. housing market remains challenged due to affordability; prospective buyer traffic/builder confidence weak 4. rise in prime and subprime auto loans as a proxy for credit conditions 5. valuations higher based on price/sales, price/book and price/earnings 6. deceleration of growth in Mag 7 stocks; however, concentration of Mag 7, media and telecom create strong influence over the S&P 500
This week, CEO Eric Boyce, CFA discusses: 1. housing affordability woes, electricity prices moving up with data center demand 2. sentiment much higher for the higher income population than for lower incomes 3. Atlanta Fed GDP estimate 3.5% annualized for 3rd quarter, despite slowing in consumer spending 4. valuations high, but forward performance coming off a market high is very respectable 5. market breadth improving, foreign ownership increasing, margins balances increasing 6. market expects 0.25% rate decrease in September, but inflation (PCE) has picked up and likely to move slightly higher next few months 7. yields converging, yield curve steepening, NO sign of recession in the high yield market 8. Foreign central banks now hold more gold than US treasuries
Dear Clients and Friends,
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This week, CEO Eric Boyce, CFA discusses: 1. Look back at lack of manufacturing growth following 2018 tariffs 2. Tariff revenue high; potential upside in capital spending in advanced manufacturing, sources of power for data centers, and other infrastructure spending 3. Misery index not foreshadowing recession; small business credit conditions remain tight 4. freight volumes, pricing subdued - may portend slowdown in consumer spending 5. consumer delinquencies picking up in some areas; paying close attention to trends 6. market breadth thin - not your father's S&P 500 anymore 7. drawdowns lead to opportunity; bond volatility higher than equity volatility & may be more seasonal than we think
This week, CEO Eric Boyce, CFA discusses: 1. Stocks have moved higher over the long term despite variations in price/earnings multiples 2. S&P 500 index is inherently different from even 10 years ago; volatility and intra-year drawdowns are absolutely normal and can lead to generous long term returns if one is patient and diligent 3. the power of long term compounded return and diversification - stocks versus bonds and cash; stocks have considerably more volatility than bonds 4. The importance of being diligent on monitoring inflation - trends in service inflation, wages provide dilemma for Fed on interest rates 5. Boom in infrastructure spending, notably data centers 6. Surge in new business applications bodes well for entrepreneurship 7. Big opportunity in offshore Asia private credit and private equity
This week, CEO Eric Boyce, CFA discusses: 1. The slowing in the labor economy due to tariffs, etc. 2. 2nd quarter GDP reflected reversal from 1Q - real read through is slowdown in final sales to private domestic purchasers 3. In 25 years, persons over 55 yrs of age own 20% more of the total household assets...implications for wealth planning and transfer 4. Potential implication on long-term interest rates from increased deficits from OBBBA 5. Second quarter earnings stronger than expected; profit margins holding steady amidst increased tariffs 6. Updates on housing starts/sentiment, consumer financial health, PMI data, consumer sentiment
On July 4th Donald Trump signed the One Big Beautiful Bill Act (OBBA), a law which extended many of the tax code changes made in the 2017 Tax Cuts and Jobs Act (TCJA) and added new provisions that will impact many of our clients. The bill totals a whopping 870+ pages so I’ll try to be as concise as possible.  Lets begin with the extension of tax breaks. The TCJA reduced federal tax bracket rates in 2017 and those lower rates were set to expire at the end of 2025. The OBBA made permanent the reduction in federal tax brackets. Below is a comparison of what rates would have been post TCJA without this permanent extension.