KMLM - 2 Great ETFs For A 'Hot Landing' Economy

2024-04-15 07:00:00 ET

Summary

• A hot inflation report has sent bond yields soaring as the bond market prices out yet another Fed rate cut.
• The market is now priced for the first cut in September and just three in the next year.
• The US economy is still accelerating, with GDP growth estimates being raised for Q1 and Q2.
• Some economists now warn about a "hot landing" in which the Fed cuts despite rising inflation, resulting in 4%-plus inflation for years.
• Two ETFs for a no-landing or hot-landing economy for your consideration.

It's been a weird year, with stocks roaring 10% higher in the first three months with barely a hiccup.

The market is 1% from record highs. The largest decline this year is 1.8%.

This is similar to 2017's ultra-low volatility rally, at least so far.

My family's ZEUS fund has had a solid start this year and based on the FactSet and Morningstar consensus forecasts for the entire portfolio, we remain highly optimistic for the future.

FactSet Consensus Return And Income Growth Potential

• 3.6% yield + 12.4% consensus growth = 16% long-term return/income growth potential + 4% discount to fair value.
• Five-year consensus total return forecast: 3.6% yield, 12.4% growth + 0.8% potential annual valuation boost = 16.8% = 117% vs. 79% S&P and 43% hedge funds.

For further details see: