FYI: This business expansion has gone on for nine years and most investors think we have to be near the end. In baseball parlance you hear talk that we are in the seventh or eighth inning; nobody seems to believe we are in the second or third. Jamie Dimon of J.P. Morgan has said at a conference we’re in the sixth, which got a lot of attention. Those who are cautious on the outlook talk about how corporate cash flows will be inadequate to service long-term debt obligations. They also raise macro issues like the large U.S. budget deficit, declining American competitiveness, worsening relationships with our trading partners, Middle East instability, a slowdown in Europe, difficult 2019 earnings comparisons and displacement of white collar employees by artificial intelligence.
We believe that the current business cycle has at least several more years left to run. The major signs that would herald the beginning of the next recession are not yet in place. Unemployment is low and likely to decline further; wages are rising, but not sharply; the Federal Reserve is tightening, but real interest rates are zero; inflation is moving higher slowly; the yield curve is not inverted; profits are increasing; and the leading indicators are still rising. Until some of these indicators change, the expansion is likely to continue.
Regards,
Ted
https://www.realclearmarkets.com/articles/2018/06/22/us_equities_are_priced_for_positive_resolution_of_global_spats_103324.html
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Or is it?
https://www.nytimes.com/2018/06/25/business/what-is-yield-curve-recession-prediction.html