A Pivotal Moment In Economic History; Fritz Meyer Economic Update, September 2022

A Pivotal Moment In Economic History

The dust is settling from the economic shock caused by the Covid-19 pandemic. Meanwhile, the Russia-Ukraine War is hot, the post-pandemic inflation crisis is far from over and seems likely to force the Fed to invert the yield curve, fueling fears of an economic downturn, creating stock market uncertainty, and, in some quarters, of a worldwide financial disaster. It is a pivotal moment in U.S. economic history. 

Amid the considerable gloom and doom, Fritz Meyer says the index of business activity in the service sector, which accounts for 89% of U.S. gross domestic product, ticked up in August to 56.9%. No collapse is under way, Fritz says. Rather, the pace of business activity in the service sector in August in about the rate averaged in the the 11-year boom from April 2009 through February 2020, when Covid hit. Moreover, the forward-looking new orders sub-component of the ISM purchasing managers index came in at 61.8%. 

Fritz Meyer's objective in teaching on Advisors4Advisors is to show advisors how to:

● compare crucial current financial economic metrics versus historical data

● stay focused on economic fundamentals driving financial markets

● provide knowledge needed to formulate and explain the outlook concisely   

● understand what the Federal Reserve is doing   

● implement a prudent investment discipline for fiduciaries managing portfolios    

● explain and analyze the latest financial economic data, including: 

● retail sales
● housing starts nosedive
● consensus forecast of economists for Q3 2022 GDP
● GDP NOW forecast for Q3 2022 GDP
● LEI is rolling over
● yield curve near inverting
● labor participation rate ticked up last month
● Latest news from the Fed 
● S&P 500 earnings
● new-job formation in August was better than expected
● manufacturing sector PMI
● consumer income and spending
● auto sales
● S&P 500 expected earnings versus current and historical p/e
● the Fed’s stock valuation mode
● DPI and savings
● household balance sheets strong
● PCED improved
● savings
● M2
● plunging savings rate
● strong personal spending fueled by savings
● the best approach to investing