The U.S. Economy Has a \u2018Hot\nSpot\u2019 – Housing \u2013 <\/strong>Economists\nand analysts on the news continue debating the shape of the economic recovery,\nwhether it\u2019s \u201cv-shaped,\u201d a Nike swoosh shape, or even W or L. But one sector\nhas emerged as looking distinctly like a v-shaped recovery: housing. In the\nmonth of July, housing soared 23% from June, hitting an annual pace of close to\n1.5 million. The housing sector declined in-line with the broader U.S. economy\nin the spring, but has since climbed back to pre-pandemic levels in terms of\nhousing starts and construction. Consumer spending on furniture, appliances,\nand home improvement has outperformed spending across most other sectors, and\nconstruction employment has recovered briskly. One familiar name in the space,\nHome Depot, underscores the sector\u2019s strength: the company posted its best\nquarterly sales growth in nearly 20 years. The National Association of Home\nBuilders said this week that its housing index touched its highest level since\n1985, with current sales, expected sales, and foot traffic all growing firmly.\nThe housing sector is no doubt benefiting from historically low interest rates,\nwhich appear poised to remain low for years to come. Additionally, the\n\u2018work-from-home\u2019 movement may be spurring new and existing homeowners to\nupgrade for more and better office space.1<\/sup> <\/p>\n\n\n\n New Housing Starts Show a\n\u201cV-Shaped\u201d Recovery<\/strong><\/p>\n\n\n\n ______________________________________________________________________________<\/em><\/strong><\/p>\n\n\n\n 7 Reasons to Stay Bullish!<\/a><\/strong> ______________________________________________________________________________<\/em><\/strong><\/p>\n\n\n\n The S&P 500 Index Reclaims\nAll-Time Highs \u2013 <\/strong>Many\ninvestors remained baffled by the stock market\u2019s surge, even as the economy struggles\nto regain pre-pandemic footing and even as Covid-19 continues to spread.\nTechnology shares continue to be a driving force behind the market\u2019s strength,\nbut recently we have seen some rotation showing other cyclical categories\nrallying as well. Small-caps and industrials have surged in August, and\neconomically-sensitive sectors like Energy have also seen strong relative gains\nin recent weeks. For investors thinking that \u201cwhat goes up must come down,\u201d\nand\/or that the stock market is wildly overvalued, we would advise against the\ntemptation to time the markets. In our view, the equity markets tend to\nprice-in economic outcomes six or even twelve months from now, meaning that\nrising prices likely reflect a post-pandemic economic and earnings rebound.4<\/sup>\nWhat\u2019s more, money supply growth via Federal Reserve policy and fiscal spending\ncurrently exceeds nominal GDP growth, which tends to result in extra liquidity flowing\nthrough the capital markets. This \u201cwall of liquidity\u201d has the potential to push\nasset prices even higher, in our view.5<\/sup><\/p>\n\n\n\n The U.S. Economic Recovery is\nUnderway, But Not Quite Robust Yet \u2013 <\/strong>Recent economic data paints a picture of a U.S. economy that\nis trickling back to life, but not quite in full force. July marked the third\nconsecutive month that retail sales ticked higher, and importantly July sales\nwere 1.7% higher than levels seen in February (the month before the\npandemic-induced shutdown). Consumers were spending across virtually all\ncategories, from home appliances to furniture, to electronics, health products,\nand food. Early data shows that August retail sales may taper off slightly,\nparticularly as the extra $600 unemployment benefit runs out and as Congress\ndebates the next round of stimulus. Other economic data points to a \u2018mixed\u2019\npicture regarding the economic recovery.6<\/sup> The New York Fed\u2019s Empire\nState survey, which tends to be a bellwether indicator for other Fed surveys\nacross the country, showed manufacturing activity slowing from July to August.\nTo say the economic recovery is losing momentum in the short-term may be\naccurate, but we believe long-term the trend still points to a full economic\nrecovery \u2013 and then some. <\/p>\n\n\n\n What is in store for the remainder of 2020?<\/strong> We look at this answer in our just-released market\nstrategy report.7<\/sup> In this report, we\u2019ll take a look at who the\nleaders of the rally were (and are), take a walk down memory lane to look for\nlessons from old investing legends, and give readers seven reasons to stay\nbullish in the uncertain year ahead. Low rates spur housing market gains, why the stock market is surging, U.S. economy trending up overall <\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73,1],"tags":[],"class_list":["post-8812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8812","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8812"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8812\/revisions"}],"predecessor-version":[{"id":10555,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8812\/revisions\/10555"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/1_Image-1-of-1-1024x395.png\")
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While the first half of the year was volatile to say the least, now we are seeing new highs in the market. This begs the question – what is in store for the remainder of 2020? We look at this answer in our just-released market strategy report.
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In this report, we\u2019ll take a look at who the leaders of the rally were (and are), take a walk down memory lane to look for lessons from old investing legends, and give readers seven reasons to stay bullish in the uncertain year ahead.\u00a0
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If you have $500,000 or more to invest and want to learn more, click on the link below to get your free report today!
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Download Our Just-Released August Market Strategy Report<\/a>3<\/a><\/sup><\/strong><\/p>\n\n\n\n
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\nIf you have\n$500,000 or more to invest and want to learn more, click on the link below to\nget your free report today!<\/p>\n","protected":false},"excerpt":{"rendered":"