click for larger graphic
I hate whenever the G-word — “Goldilocks” — gets trotted out. Its too complacent, too pat, and it often means we are heading for trouble.
That said, I find the chart above quite fascinating. Its from Fidelity, and it suggests we are in the sweet spot for equities:
“The U.S. economy has been expanding at a modest but consistent clip (with real GDP growing at 1.6% year over year as of Q2), inflation has been subdued (with the core Consumer Price Index [CPI] rising 1.7% as of Q2), and the Fed has kept the liquidity spigot wide open through QE3 (at $85 billion per month since September 2012).
Meanwhile, the eurozone economy has stabilized and China appears to be recovering from its slowdown. As of September, 72% of the countries for which Markit/HSBC publishes manufacturing PMI (Purchasing Managers Index) data were in expansion, up from 69% in August and 59% in July. So, for the first time in several years, the global economy seems more synchronized.”
Fidelity describes this as “the best of all worlds for stock investors.” While that’s a touch too Candide-like for my tastes, I cannot deny that cconomic growth has been positive while inflation has been subdued, and the Fed is not tapering anytime soon.
Smoke while you got ‘em . . .
Outlook: Can the Goldilocks sweet spot continue?
Fidelity Viewpoints, 10/20/2013
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
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