Fritz Meyer Economic Update, December 2019

A year ago, the Fed hiked rates, triggering a brief bear market in stocks. Today, the Fed has uninverted the yield curve, and generally positive data have pushed stocks to new record highs.
 
Record-high employment coupled with record-high real wages have investors expecting that consumer spending will drive GDP growth, despite weak manufacturing and exports. A slowdown is not on the horizon and tariff cuts could be in the works.

At 19X trailing earnings, the S&P 500 is fully valued. At 17.5X 2020 earnings estimates, the S&P 500 could continue to rise in 2020, under the current consensus forecast. With negative interest rates abroad and record-low bond yields at home, a market P/E ratio at 18X or higher may be fair. In fact, the S&P 500's inflation-adjusted P/E ratio suggests stocks are on the cheap side.
 
At this month's update, we'll discuss the yield curve and the Fed, earnings forecasts, P/E ratios, and the global demographics driving record-low bond yields, altering expectations for diversified portfolios. We'll also look at the Fed's latest Financial Stability Report and examine the track record of popular pundits, including Paul Krugman, George Soros, Nouriel Roubini, Jeffrey Gundlach and David Rosenberg.


Fritz's monthly updates averaged a 4.9-star rating for the past year, and past performance is an indicator of future results: data-driven strategic long-term analysis for professional investors.

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Before Fritz began advising advisors on A4A in March 2011, he was a mutual fund portfolio manager for many years at one of the world's largest investment companies and then served as its senior investment strategist, spokesman in crises, and top educator of financial intermediaries.

This webinar is eligible for one hour of CE credit towards the CIMA® and CPWA® certifications, CFP® CE, PACE credit toward the CLU® and ChFC® designations and live CPA CPE credit.