• ICYMI, it’s palindrome week

    Houston, we have a debate The third Democratic presidential debate in Houston this week was the first time Joe Biden and Elizabeth Warren shared a debate stage. Expectations for drama were obviously quite high. Topics of “discussion” included universal pre-K, universal health care, taxes, minimum wages, and climate change. Variations on a theme included the need to remove Trump from the White House and the love of Obama.  Moral of the story: The Democratic Party still has a long way to go before any one candidate emerges as a clear winner but a few agenda items seem to be universal across the board. Trump’s policies benefit energy, infrastructure, and defense…

  • It’s Going Down

    Timber!  It finally happened guys, the ISM manufacturing index fell below 50, indicating a contractionary environment. Economists were expecting the index to remain in slightly expansionary territory, but the 49.1 reading in August is the lowest since January 2016. We saw a marked decline in both new orders and production this month as only half the industries reported any growth in August and only 17% of industries reported growth in new orders.  Moral of the story: This index has been dangerously approaching contractionary territory for months and this report is indicative of a notable decrease in business confidence during the month of August. This index has fallen 10 points since…

  • Back in Business

    Better than expected  Second quarter GDP was revised slightly downward to 2% driven by weaker exports and corporate investments. This 2% number is significantly lower than the 3.1% growth rate we saw in the first quarter (remember much of the growth last quarter was driven by factors more short-term in nature like inventories and trade). The revision for the second quarter indicated stronger consumer spending, which grew at the strongest pace since 2014. Business investment, conversely, was weaker driven by uncertainty caused by geopolitical risks. Moral of the story: The second quarter proved that consumers continue to be the engine of economic growth while businesses are standing at the sidelines waiting to see what…