There is no reason to own US equities
Economic weakness, not interest rates, will weigh on a stock market depending on very aggressive profit forecasts
I’ve been arguing for months that the US economy is probably as weak as the Atlanta Fed GDP Nowcast makes it out to be (1.8% growth).
1) The Trump corporate tax dividend ISN’T going into capital expenditures, judging from the orders data (not even 10% YOY increase despite the drilling boom).
2) Households can’t carry the ball if wage growth is flat and the savings rate is at all-time lows.
As I’ve said all year, I don’t think rates are going anywhere. But the US equity market depends on some very aggressive profit forecasts.
The most important development in the past few months, though, is the video of Uber’s self-driving car killing a woman in Tempe, Arizona. That (along with the Facebook scandal) will have a big impact on the public’s perception of tech.