After more than ten years of straight expansion, the U.S. economy has clearly entered the late business cycle. August marks the 122nd month of the economic expansion, which is the longest in U.S history. However, the current expansion is one of the softest, as the cumulative total of the GDP increase was only 25%, which increases the possibility that the current business cycle could continue.
(Source: St. Louis Fed)
During the late cycle, the earnings growth is usually slowing, which should limit multiple expansion. With earnings growth set to slow, investors may want to focus