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The Weekly Update 4/12/2024

| April 12, 2024

The Weekly Update 4/12/2024

  

The Recession That Didn’t Recess! ™

The recession that has been predicted for over a few years has still not shown up.  In fact, I would argue the opposite is true, i.e. economic expansion.

Below is a graph from Yardeni Research.  It tracks the key inputs to economic growth.  More people are working, earning and spending than ever before. Note to self, as you look at the chart below observe all inputs rest at all-time highs.  Also note, that since the Covid induced recession these trends have been going up since 2009, 15 years ago!

 

 The chart below is available online 24/7, if you choose to pull it up for a look now and then!

 

So, “if” the recession that didn’t recess instantly hit, and let’s pretend it is the worst in our lifetime, or a -5% contraction, it would reduce our Gross Domestic Product all the way back to early 2023.  You may recall 2023 was not all that bad.

 

At the current economic growth rate our economy will click past $28 trillion on about July 4th, 2024.

Yes, market valuations separate from the economy now and then.  And yes, we could see the values of Corporate America go down about now for reason(s) you choose to pick!

But these values have “ALWAYS” come back up to the economic growth level.  If this were not true, we would not be at, or near, all-time highs in both economic growth and market valuations.

P.S. Taiwan semi-conductor just signed a formal agreement to build a $70 billion chip factory in Arizona where it will produce the most advanced chip on planet earth.  Do you notice a trend here?!

I’m interested in your thoughts, comments, and observations.  Feel welcome to call, email, or stop by the office and say Hi.

Respectfully,

James O. Lunney, CFP®

CERTIFIED FINANCIAL PLANNER™ Professional  

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.