U.S. economy – Perry International Capital Partners

“Can you say: Balanced budget?”

Optimism is rising for two main reasons: The U.S. economy and markets are going to continue to improve because Trump’s pro-growth, America-First administrative agenda – which will include tax cuts, deregulation, decreased trade deficits, and, most importantly, reduced government spending – promises to be extremely effective. Investors know it. Confidence has skyrocketed on the part of corporate executives, small businesses, households, students, and… even farmers.

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“The greatest threat facing humanity is a radical Islamist regime meeting up with nuclear weapons.”

Newsletter / perrycap

The S&P 500 traded to yet another all-time high last week: $5,878. The benchmark closed Friday at $5,865, up 0.9% on the week, while the Dow rose 1%, and the NASDAQ was up 0.8%. The U.S. equity market performance marked the 6th straight week of gains––the longest winning streak of the year.
This should surprise no one. This is an unsurpassed, debt-fueled, inflationary growth cycle.
Gold, too, is at another all-time high ($2,749.)
70% of S&P 500 companies reported earnings, and 75% beat expectations, which (truthfully) were marked down over the last month––so, essentially, coming in close to expectations (+6%).
Treasury yields continue to climb and have done so since Powell cut the Fed funds rate on September 18th. This confirms that the financial system, the economy, and markets do not require more stimulus at a time when debt and deficits, along with robust consumer spending and a growing labor force, are providing ample liquidity. 10y Treasuries were bought at 3.595% the day before (3.595%) and have risen to 4.217%. That’s a yield increase of +0.62%.

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“He who awaits much can expect little.”

Newsletter / perrycap

The Big Story of the Week was Powell’s speech in Jackson Hole. The Chairman’s message was clear: The Fed’s focus has shifted exclusively in the direction of U.S. Employment. Inflation will be allowed to run hot–especially in services and shelter.
There was little doubt that more stimulus was coming. Powell has signaled for months that he wants to stimulate—all he needed was supporting evidence. He got it. The BLS revised its new job calculations (Reducing the new jobs created in the year by over 800,000), which now indicate that employment growth was 30% lower than previously advertised.

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Deep Dive: The Rise and Fall of China

Deep Dives / perrycap

The U.S. and China are meeting in San Francisco. Shifting macroeconomic fortunes and geopolitical challenges concerning security, technology, trade, and military conflict in Ukraine, Gaza, and Taiwan, will feature prominently, as will the military alliances the Chinese are nurturing with Russia, Iran, and North Korea.

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Shallow Dive: Parsing the Fed

Deep Dives / perrycap

In 2001, Jim O’Neil of Goldman Sachs coined the acronym BRIC to define an asset class for promoAng
investment through Goldman, of course, into Brazil, Russia, India, and China.

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