The Roman stoic Seneca wrote, “there are more things…likely to frighten us than there are to crush us; we suffer more often in imagination than in reality.” Corporate earnings for the third quarter are now being reported. So far, they are excellent. Companies are not only surviving, but they are also growing again. Recession? What recession?!
For well over a year, analysts and economists have been predicting a downturn or worse. Just as soon as we get strong, heartening data points and news from our economy, they merely prolong their prediction for when it will happen. Therefore, it has been difficult for investors to develop a longer-term positive view of the business environment. How much longer the cries of “the sky will fall,” is anyone’s guess, but they certainly should be discredited by now!
Third quarter GDP growth is now estimated to be 4.9%. Take that recession predictors! There are three very large Federal programs investing in our economy over the next few years: the IRA, the Chips Act, and the Infrastructure Bill. It is hard to see a general downturn with this new money coming in. Corporate earnings for the recent quarter are now being reported, and they are coming in strong. Commentary from the companies is also positive. The investment backdrop is good. The current jitters will subside as light shines on our reality. Stay positive and stay steady my friends.
The Lonely Bull