This week, CEO Eric Boyce, CFA discusses: 1. sales growth heading into holiday shopping season; economic indicators looking at +4% annual economic growth coming out of the 3rd quarter 2. factory orders positive but not "strong"; labor market weakness outside of leisure, hospitality, education and healthcare 3. new home prices now below existing home prices due to inventory shortages, high % of mortgages still below 4%, builder incentives 4. financial conditions "looser"; Philly Fed/Kansas City Fed report softer new orders, but perhaps some optimism on the margin 5. delinquency rates picking up in commercial office, as vacancies continue to rise 6. consumer credit indicators holding somewhat steady, except for credit card delinquencies 7. market correction underway in tech stocks; overall volatility is back on the table (especially for many of the Mag 7 and bitcoin) 8. consumer discretionary outperforming staples; equal weighted S&P 500 at a historic lag to capitalization weights 9. cattle, cotton, cocoa prices in decline. offset by corn, soybeans
This week, CEO Eric Boyce, CFA discusses: 1. small business and corporate sentiment appears favorable; capital spending trends and expected pricing power looking better 2. some stress in the credit markets, especially student loans; bankruptcies higher 3. evidence of K-shaped economy - healthcare premiums, groceries, lower wage growth 4. global and US valuations are indeed stretched, although this is not your father's S&P 500 - concentration of technology makes some historical comparisons difficult. Most consecutive days of the S&P 500 trading above its 50 day moving average since 2008 5. stocks fueled by liquidity, better than expected earnings performance and higher sustained profit margins 6. volatility still relatively low, but risk of increased volatility is prevalent 7. growth stocks outperforming value, large outperforming small; international returns expected be higher than US looking out 10 years, per Goldman
This week, CEO Eric Boyce, CFA discusses: 1. Record length of government shutdown; estimated economic impact $10-30B per week 2. stock valuations bifurcated between Mag 7 and rest of market; profit margins remain elevated despite tariffs; earnings beats during latest quarter remain well above average. 3. high level of short term treasury bills increases supply & keeps interest rates likely higher than would otherwise be the case 4. relative size of US markets to the world dramatically higher than the global financial crisis 5. credit quality ok; delinquencies manageable (except for student loans) and may have reached an interim peak 6. labor market weakness, but not a large problem; other economic indicators not unfavorable 7. holiday sales forecast calls for 4% growth; median age for first time homebuyer is 40 years
This week, CEO Eric Boyce, CFA discusses: 1. the K-shaped sentiment indicator represents the difference between how the higher income populations view the economy versus the lower income levels. 2. inflation sticky, compounding Fed decisions. Future inflation expectations elevated 3. tariff rate ~15%, some increase in small business price increase expectations 4. profit margins expanding for Mag 7; flat to contracting for everyone else in S&P 500 5. increased breadth of market performance relative to 2023/24, but lower versus historical averages 6. delinquencies and defaults are higher, but may have peaked...(?) 7. banking system in good shape from a capital and loss coverage ratio perspective 8. perspectives on the use of alternative investments in a portfolio depending on age and net worth 9. GDP relative to stock prices going back to 1800; 10.gold as a hedge against uncertainty, increased central bank (and China) purchases of gold versus US treasuries
This week, CEO Eric Boyce, CFA discusses: 1. economic forecasts has consistently been wrong this year; however, Atlanta Fed GDP Now has been relatively accurate - predicting strong growth in 3Q 2025 2. financial conditions have improved, but so have inflation expectations. Fed has dual mandate, but weakening labor market is the primary focus right now 3. lower US dollar can help fuel inflation, Federal Reserve regional surveys show increase in prices paid 4. low credit spreads, capital spending plans higher, trade policy uncertainty moving lower - no signal of recession at this point 5. private equity and credit markets continue to expend in size and importance
This week, CEO Eric Boyce, CFA discusses: 1. near term trends in economic growth and employment are diverging. Labor weakness giving Fed cover to lower interest rates. 2. recession probability low, bank lending up, goods inflation growth year-over-year is now positive. 3. consumption and retail sales trends are not unfavorable, but record-high credit card balances are. 4. no sign of US dollar disintermediation - Euro as a percent of global reserves remains flat, and record high foreign investment in US stocks. 5. stock valuation higher - possible near term volatility. positive return outlook, however. 6. the diversification power of alternative investments within a portfolio.
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
This week, CEO Eric Boyce, CFA discusses: 1. sales growth heading into holiday shopping season; economic indicators looking at +4% annual economic growth coming out of the 3rd quarter 2. factory orders positive but not "strong"; labor market weakness outside of leisure, hospitality, education and healthcare 3. new home prices now below existing home prices due to inventory shortages, high % of mortgages still below 4%, builder incentives 4. financial conditions "looser"; Philly Fed/Kansas City Fed report softer new orders, but perhaps some optimism on the margin 5. delinquency rates picking up in commercial office, as vacancies continue to rise 6. consumer credit indicators holding somewhat steady, except for credit card delinquencies 7. market correction underway in tech stocks; overall volatility is back on the table (especially for many of the Mag 7 and bitcoin) 8. consumer discretionary outperforming staples; equal weighted S&P 500 at a historic lag to capitalization weights 9. cattle, cotton, cocoa prices in decline. offset by corn, soybeans
This week, CEO Eric Boyce, CFA discusses: 1. small business and corporate sentiment appears favorable; capital spending trends and expected pricing power looking better 2. some stress in the credit markets, especially student loans; bankruptcies higher 3. evidence of K-shaped economy - healthcare premiums, groceries, lower wage growth 4. global and US valuations are indeed stretched, although this is not your father's S&P 500 - concentration of technology makes some historical comparisons difficult. Most consecutive days of the S&P 500 trading above its 50 day moving average since 2008 5. stocks fueled by liquidity, better than expected earnings performance and higher sustained profit margins 6. volatility still relatively low, but risk of increased volatility is prevalent 7. growth stocks outperforming value, large outperforming small; international returns expected be higher than US looking out 10 years, per Goldman
This week, CEO Eric Boyce, CFA discusses: 1. Record length of government shutdown; estimated economic impact $10-30B per week 2. stock valuations bifurcated between Mag 7 and rest of market; profit margins remain elevated despite tariffs; earnings beats during latest quarter remain well above average. 3. high level of short term treasury bills increases supply & keeps interest rates likely higher than would otherwise be the case 4. relative size of US markets to the world dramatically higher than the global financial crisis 5. credit quality ok; delinquencies manageable (except for student loans) and may have reached an interim peak 6. labor market weakness, but not a large problem; other economic indicators not unfavorable 7. holiday sales forecast calls for 4% growth; median age for first time homebuyer is 40 years
This week, CEO Eric Boyce, CFA discusses: 1. the K-shaped sentiment indicator represents the difference between how the higher income populations view the economy versus the lower income levels. 2. inflation sticky, compounding Fed decisions. Future inflation expectations elevated 3. tariff rate ~15%, some increase in small business price increase expectations 4. profit margins expanding for Mag 7; flat to contracting for everyone else in S&P 500 5. increased breadth of market performance relative to 2023/24, but lower versus historical averages 6. delinquencies and defaults are higher, but may have peaked...(?) 7. banking system in good shape from a capital and loss coverage ratio perspective 8. perspectives on the use of alternative investments in a portfolio depending on age and net worth 9. GDP relative to stock prices going back to 1800; 10.gold as a hedge against uncertainty, increased central bank (and China) purchases of gold versus US treasuries
This week, CEO Eric Boyce, CFA discusses: 1. economic forecasts has consistently been wrong this year; however, Atlanta Fed GDP Now has been relatively accurate - predicting strong growth in 3Q 2025 2. financial conditions have improved, but so have inflation expectations. Fed has dual mandate, but weakening labor market is the primary focus right now 3. lower US dollar can help fuel inflation, Federal Reserve regional surveys show increase in prices paid 4. low credit spreads, capital spending plans higher, trade policy uncertainty moving lower - no signal of recession at this point 5. private equity and credit markets continue to expend in size and importance
This week, CEO Eric Boyce, CFA discusses: 1. near term trends in economic growth and employment are diverging. Labor weakness giving Fed cover to lower interest rates. 2. recession probability low, bank lending up, goods inflation growth year-over-year is now positive. 3. consumption and retail sales trends are not unfavorable, but record-high credit card balances are. 4. no sign of US dollar disintermediation - Euro as a percent of global reserves remains flat, and record high foreign investment in US stocks. 5. stock valuation higher - possible near term volatility. positive return outlook, however. 6. the diversification power of alternative investments within a portfolio.
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
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