SPUS - Soft Landings Are Confusing By Design
2024-04-04 10:36:26 ET
Summary
- Market and economic forecasts that predict a burst in bubbles or no rate cuts by the Fed are the mortar used to build the wall of worry.
- The ADP payroll report showed an increase in jobs and pay, but the overall trend still suggests a softening labor market.
- The ISM non-manufacturing PMI reflects a continued slowdown in the services sector, with prices paid component falling to a four-year low.
- Soft landings are confusing because they depict both strength and weakness, which is also why they are so rare.
A couple of down days for the major market averages have frustrated bears calling for bubbles to burst, while others conjecture that the Fed won't cut rates a single time this year. I think these party poopers are simply frustrated that neither the market nor economy is aligning with their way of thinking. I am using these forecasts as mortar to lay between the bricks that form the wall of worry this market should continue to climb. The trend remains the bulls' friend, but that doesn't mean that we won't see high-frequency economic data that calls into question the soft landing narrative, as such a landing can be as confusing as it is rare....
Soft Landings Are Confusing By Design