RTX - Deteriorating Consumer Health Tops My Economic Worry List

2024-01-24 18:00:11 ET

Summary

• All three of the major stock indexes have hit all-time highs in recent trading sessions despite chances of a much-anticipated rate cut from the Federal Reserve in March fading.
• Manufacturing remains in contractionary territory, the monthly Leading Economic Indicators just fell for the 21st month, and the housing market remains moribund.
• However, it is the deterioration in the health of the American consumer that should be the primary worry for investors, since consumer spending powers nearly 70% of economic activity.
• Can the market continue to rally when so many economic indicators are flashy yellow?
• Why this is not likely is highlighted in the paragraphs below.

Even if the government spends itself into bankruptcy and the economy still does not recover, Keynesians can always say that it would have worked if only the government had spent more ." -Thomas Sowell.

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