Guest Column: Economy Slow, but Should Improve and Propel Markets

May 3, 2016

May 3, 2016 | DI Wire

By: Daniel Wildermuth, Co-Founder & Chief Executive Officer of Kalos Management, Inc

After a dismal January and early February for U.S. and global equity markets, the past couple of months have gone well. Once recession fears mostly dissipated, broad-based equity markets reversed losses of over 10 percent on the year to rise back into positive territory by the end of April.

Still, as expected, first quarter U.S. economic growth was anemic, slowing to its weakest pace in two years as global demand remained shaky and the strong dollar hampered exports. According to the Labor Department’s advance Thursday estimate, GDP increased at a 0.5 percent annual rate, an even slower rate than the 0.7 percent original forecast of economists polled by Reuters. The Commerce Department’s late April report also suggests business spending and economic growth were weak in the first quarter.

While it may be surprising to see markets recover against such an uninspiring backdrop, muted optimism results from several different areas. First, fears of an impending recession – and all the overhyped talk associated with the subject – appear to have largely passed. While an expansion of 0.5 percent is weak, it’s still an expansion. Moreover, stronger future growth appears very likely.

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Matthew C. Strife
Blue Vault Services
April 11, 2016

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