Welcome to the Golden Eagle Eye - Eye on the Stock Market segment featuring macroeconomic and stock market commentary. We have Robert Zuccaro with us, Founder & CIO of Golden Eagle Strategies. He is a quant pioneer specializing in aggressive growth stock investing and author of the book "How Wall Street Reshaped America’s Destiny".
Let's talk about economics. What I regard is the most important economic indicators, and I would invite anybody to volunteer what these two are. ISM, manufacturing and service. The manufacturing economy has been supposedly contracting for several months now because a reading under 50 implies that the economic base is contracting. The service sector, which has been very vibrant, in one month has dropped from 56.5% on its reading, which means a very strong trajectory of growth to 48.6%, so the economy clearly has softened. It could be that December may mark the first month of recession, but we need to look at the month of January.
I was speaking to somebody who went to a trade show, the family is in the jewelry business, and they said that forward orders were very brisk, which means that the high-end industry is placing big orders for the end of 2023, so it's conceivable, that the service index will bounce back in the month of January. The World Bank has reduced its estimate for worldwide growth from 3% to 1.7%. In the survey recently of corporate CEOs, the consensus is they expect a short and mild recession, which is a step back from some of the expectations earlier.
Home sales last month were up by 3.5% and we're talking about existing home sales. They've been in downward trend now for nine months, and the decline in the month of November was the steepest in 12 years. So, there are signs out there that the economy is softening. The question is not 'is it softening', but 'will it re-strengthen again'?
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Please note, that the thoughts expressed in this podcast are those of the presenter. This is not, nor should it be considered an offer or a solicitation of an offer for investment.
Manager of the Golden Eagle Growth Strategy
