Key insights
- The author questions the prevailing bullish sentiment in the face of weak economic data (GDP miss), persistent inflation, and potential negative impacts from geopolitical events (war and rising energy prices). The argument suggests that traditional bearish indicators are being dismissed due to hopes for rate cuts and continued corporate profitability, despite deteriorating economic fundamentals. This skepticism implies a potentially negative outlook for US equities.
Seems like there's been a bull case for everything that's historically been bearish.
Job numbers are terrible, no problem that means we're more likely to get rate cuts and the GDP numbers are still good.
Inflation is high, no problem it's only temporary because of tariffs and corporate profits are still rising.
The latest GDP figure badly missed estimates, the expected was 2.8% and the latest real data is 0.7% which could be revised lower. This was before the war started, the higher oil and gas prices will surely turn the next quarter negative.
If you're still bullish, why?