The Stock Markets are Ripping Up. The Economy is Slowing. What Could Ultimately Be Wrong?

If all is well with the economy, why did the FED just turn so Dovish? According to the Bureau of Economic Analysis at the U.S. Department of Commerce, ~68% of the U.S. economy is based on the U.S. consumer’s spending and Fixed Investment accounts for another ~17%. The Fed just acknowledged that at least 75% of our economy is slowing!

Consumption Imports Exports Government Investment

Whether it’s the trade war, the reversal of trillions of dollars of Quantitative Easing (QE) by the world’s Central Banks, the fact that this period of economic expansion is within months of becoming the longest ever, or some combination of global-macro factors, the data does not lie. Markets are up yet the fundamentals of market and economic growth are going down. Which one will ultimately be wrong?

This article was contributed by Dave Haviland, Portfolio Manager at Beaumont Capital Management, a participant in the ETF Strategist Channel.

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