AFMC - Fed Rate Cuts Imminent: 5 Things Dividend Investors Need To Know
2024-07-17 07:00:00 ET
Summary
- A busy two weeks of economic data has a lot of important implications for Main Street and Wall Street.
- Inflation is cooling, with CPI below expectations and worker earnings outpacing inflation for the 16th consecutive month. Real-time inflation data is pointing to 1.3% core inflation within a few months.
- Economic growth is slowing, and estimates converging around 2% of GDP growth point to a likely soft landing, though the mild recession risk in 2025 is rising.
- Market valuations are getting richer, but not dangerous. The earnings outlook remains bright, with expectations of double-digit growth for the S&P 500 for the next 4 quarters and 2.5 years.
- US companies are the envy of the world because we can afford to pay our executives billions in stock. The American dream is universal, and the world's best executives come to the US to run our companies.
It's been a busy two weeks of economic data that convinced the bond market that Fed cuts are imminent.
While "all else equal" rate cuts are bullish for stocks, in our complex world, all else is never equal....
Fed Rate Cuts Imminent: 5 Things Dividend Investors Need To Know