Business fixed investments are expenditures by firms on equipment and structures.The growth over 12 months in this important segment of the economy is negative as of the last report available on 4/27/07. In other words, fixed investment declined in the past 12 months.
The graph (click on graph to enlarge) shows the growth pattern since the 1940s. The message: growth at this levels has almost invariably be associated with recessions or very slow growth.
Implications? The Fed will have to ease because of the sharp deceleration in business optimism. Inflation is likely to decline. The financial markets (stocks and bonds) will respond favorably. This scenario favors specific asset classes and stock sectors.
More on https://www.peterdag.com/
George Dagnino, PhD
Editor, The Peter Dag Portfolio Strategy and Management
Since 1977
No comments:
Post a Comment