Weekly Economic Report
Despite a mid-week digger on the President’s tweet calling off negotiations, the equities market has shaken off its September blues as the potential for new stimulus remains in play with Trump’s new offer of $1.8 trillion. Even if rejected before the election, this becomes the marker for the minimum package soon after. Indeed, with the market increasingly focused on profits late next year and beyond, it was the possibility of a Democrat sweep – and the possibility of Pelosi-sized spending largesse with many more trillions – that underpinned recent optimism. Even without any new stimulus, high frequency data on consumer spending and rapidly declining continuing claims continue to signal that the economy is improving at a much more rapid pace than among the consensus of economic forecasters. As over the past several months, professional investors have a much different view of the world than economists. We remain in the most optimistic tail of the distribution, sticking with our call for 33% growth in the third quarter – but, now willing to upgrade our outlook for the fourth quarter from 10% to 12.5%. The consensus is around 25% for Q3 and a paltry 4-5% in Q4. Obviously, we will take the over.