top of page

Market Update 6/18/24

Economic Cracks

Quarterly earnings reports are in, and the results are mixed. What’s apparent from the reports of retailers is that consumer spending is slowing, especially on the low end. That’s been confirmed by the retail sales number released today which was lower than expected for a second straight month. As anticipated, the lag effect of higher rates is finally taking hold and earnings reports are the first place we look for evidence. Nevertheless, there is opportunity in every market environment and take advantage.

Economic shifts are inevitable, and I’ve seen some rapid ones during my 25 years in the business. However, this change has been more gradual as monetary policy in the form of higher rates was offset by the overwhelming fiscal spending. In these situations, the consumer eventually “trades down” to manage their budget and this time was no different. The beneficiaries are companies like Costco, which is up 32% this year. Consumers are looking for discounts and deals and keen operators like Costco have delivered.

Going forward, the pressure on consumers will increase and I expect GDP numbers will come in lower than anticipated. The crescendo for rate cuts will build and eventually, the Fed will cut, just as the ECB did on June 6th. Not only should equities be adjusted accordingly, but investors should lock in longer-term debt. We are doing both for our clients and it's working.

As always, I appreciate your continued trust and confidence.

59 views0 comments

Recent Posts

See All


bottom of page