Well, 2018’s second quarter earnings season is history.  It was pretty much a repeat of the first quarter.  Once again, if you were to read the headlines, you would be led to believe the end-of-times was near.  Reporter anxiety continues to run high and, at times almost hysterical.  The continuing trade spat between the U.S. and China (and other countries), the threats from North Korea and Iran, the geopolitical risk from a populist Italy and a messy Brexit, or any one of several Trump tweets all ensured the fear-based media operated in full-on mode.  Of course, this in turn has fed market volatility, which has risen considerably in 2018.

While that approach may be good at grabbing attention, it does little to convey the current situation of our global economy.  The headlines are all bark, no bite.  The reality, at least at this early juncture, is that the tariffs have yet to have any impact on the U.S. economy.  Small business sentiment continues to run high and, producers are in growth mode.  And, more importantly, broad based consumer confidence continues to run high as well.  75% of our GDP is created through consumer spending and, make no mistake, the consumer is spending!!  Unemployment is at record lows, wages are rising, and the public feels confident in their financial position.

Having said that and as mentioned in our 2nd quarter economic update blog, there are indications businesses are taking a wait-and-see approach.  Key leading indicators are beginning to slow somewhat.  While the business environment continues to be positive, the political static around global trade is causing them to take a more cautious and measured approach to business investments, which is prudent.

The global economy also continues to perform well, both in advanced and emerging market economies.  Growth was supported by higher investment in advanced economies, higher consumer demand in emerging markets and a rebound in global trade (albeit a potential result of countries increasing trade ahead of the implementation of tariffs).

However, the potential for an economic slow down is far greater across the globe.  International central banks will begin tightening monetary policy, U.S. fiscal stimulus will end, and China’s economic slowdown may progress.  Despite positive near-term economic prospects for the world, debt levels, escalating fears about trade wars, and geopolitical tensions (specifically populist policy in Italy and Spain) pose a significant threat.

On Thursday, November 1st, we will conduct our quarterly Economic Review Webinar.  The focus of this webinar is to review the overall status of the U.S. and global economy.  Whether you are a business owner or individual investor, join us to learn about how things have gone and where we see things heading.