Recent US Economy Growth and Efforts to Tame Inflation

Needless to say that the US economy shows strong resilient despite of continued pressures from the authority to tame the aggregate demand through monetary policy. Our analyses months ago not only correct to point-out direction of the growth, but also have been proved again and again that they are credible analyses. Why are the Association’s analyses on the economy are credible–because it is applying simple logic and use data. The inflation is caused by strong aggregate demand because people have jobs and that they can afford to buy stuff though under higher interest rates or higher retail prices. Strong labor market occurs because the industry, both manufacturing and services are growing as results of great US manufacturing responses to relocate their business and production facility back to the US. So, the positive impacts are coming from the input market, and it has less to do with monetary or fiscal policy. It is the productivity of labor that makes it happens. We come to the conclusion that the monetary policy to tame the inflation as it always said so–actually is directed toward the equity market–not to tame inflation. The authority is trying to tame down or control too much speculations that have been played out in the market.

Disclaimer: This post has nothing to do, and therefore not intended as the reason or implies any suggestions to make any current and future investment in any forms.

Again, We Are Correct: Traders Cashed-in

At early trading today, the Association has predicted that the DOW may potentially turn red despite the good news on the GDP due to profit taking. At one point, NASDAQ shot-up to over 200 points before it was red by 77 points and the DOW lost by 237 after the market closed. Wanna to guess what will happen tomorrow? Traditionally, it will be red on Friday. Will it bloody read tomorrow then?

Disclaimer, the Association does not suggest to anyone to make any move or any trade or investing strategies in all forms.

Strong Employment Causes Positive GDP Growth

Needless to say, using the logic from Econ 101 college course, one might be able to predict that a US strong labor market will have positive immediate impacts on the US economy. These positive effects are (1). GDP grows positively; (2). Estimated corporate’s bottom line will be better. As results, one will see the DOW turns green in the past a couple of weeks (in the second and third week of July, 2023). Right at this moment, no strong and obvious symptoms that will reverse the moves. However, traders will surely cash-in or taking profit. This will come sooner or later. Just be watchful!!

Disclaimer: This post does not suggest any particular trading strategies to anyone in the stock market or any action related to financial matters.

Fed Interest Hike No Longer A Negative Factor

On Wednesday, July 26, 2023, the Fed raised the interest rate again. But this time, the market reacted differently. The new rate reflects the highest interest rate in 22 years. However, the DOW seems to ignore it and close in green which is the longest winning streak since 1987. This market performance again confirmed our earlier analyses posted in the BLOG on June 02, 2023.

With this fact, one might infer that the ROI of investing in the market surpasses the cost of capital driven by outperforming US economy.

Congrats Student Loans Borrowers

Ten years ago, the Association has completed analyses on student loan issues and their impacts to the welfare of the average Americans. Data have shown, Uncle Sam can not afford to keep increasing the college tuition, and, at the same time dump all the college inefficiency to the young Americans to bare the spending sprees through their shoulders. However, certain color in the isle just does not have enough sense and urgency to see what the young and working class in America have to suffer. Because of the loans that they have to take, and the interest and other financial punishments they have to endure. It is not because the other color is brainless or incompetent. Rather, it is because they just do not care. Even this side of the isle sues the administration that tries to ease the young and working class’ burdens. To make it more heavier, this color was supported by the high court to form a percent storm. Now that we learned new policy was crafted to help the student borrowers. With this new development, one can predict what will be the results of 2024 big dance. Congrats America!!

DOW Will Soon Hit 35K: As Data Predicted

Disclaimer. You read articles based on your decision alone. Our analyses do not suggest to take a particular position in any forms of investments or financial strategies. The Association does not make any recommendations on any type of financial decisions.

Needless to say that our analyses which published six weeks ago (June 2nd, 2023) have been proved again by the market. Read the BLOG here. Those who comprehend what we said about the 7 elements will enjoy the benefits. However, it may need to go through several iterations before it finally passes the 35k. Again, and again our analyses are correct for we use data–not rumors. We use common sense–not lies. We rely on logical approach–not skirmish among different colors. We only have one color–the love to help others to grow.

Strong Job Market: Good for Uncle Sam

Is it bad or good to have strong job market? AAEA has discussed that one of the factors that makes Uncle Sam has a strong job market is because of the positive effects of the global supply chain shifts. The results of these changes are pretty obvious. While the US job market is getting stronger, the contrast is happening in the second largest economy. Not surprisingly, when this starts happening, things are also quieter in the strait of Taiwan. There is a real connection between the geopolitics and the way the DOW behaves. War in Europe is getting closer to an end–especially after the recent insurrection. Unless the loser goes nuke. This affects the second largest economy country to think hard of the consequences to further harass the countries in the strait of Taiwan, and other bordering Asian countries. As the Treasury Secretary is making the trips, it is pretty obvious that playing hard is not a winning strategy for anyone.

Now, will a strong job market poses negative affects to the US? The answer is not at all. The multiplier effects will bring more positive energies into Uncle Sam’s economy. The Fed can raise the interest rate to whatever its little economic simulation model results show, yet the show must go on. What matters is how the society–folks in America perceive and benefit from the stronger job market. If one has a job, she or he is able to pay all the bills. For working class folks–that what matters most.

SCOTUS Is An Emerging Sole Power Player

The idea of separation of power lead the founding fathers to differentiate three branches of government-legislative, executive and judicative. However, observing what has happened recently in the country, one will start thinking if this power sharing is still working effectively in the US. One may observe that the country is becoming toward modern-totalitarian state where the SCOTUS is the real ruler in it. This shift of ideas can be seen from the individual member as well as from the group conduct. Like in any other totalitarian country–the ruler–regardless of right or wrong makes the final decision which impact every citizen. This is what one see is happening in the country. The question that one might have is who will do the check-and-balance for the SCOTUS action? If there is none–then parallelism thought us that it will not be different than those of the ruler’s actions of the totalitarian country.

Happy ..dependence Day

Eight years ago (July 4, 2015), the Association has written an article on students loans and purchasing power of young American generation. Eight years later, the student loan borrowers learned they faith, which will give them the real picture of their bleak financial future, especially for the middle class family. Financially independence for most Americans may just be a dream, especially for most working class, and SCOTUS’ role is obvious in making that to happen.

July 04, 2023 marks the 247th anniversary of the Independence of the United States of America. For some, the celebration this year clouded with so many uncertainties (financially, employment as well as politically). Contradict to the common wisdom–usually one gets older, she or he will be wiser–at least expected to be one. The US citizens can ask the same question. Is the American society more dependent now, then before? The answer may be differ from one person or from one group to others. At least one could infer that with the recent SCOTUS’ ruling on the students loans, millions of young generation are suffered or potentially will have a cloudy financial future.

The recent ruling is not all bad–but it helps triggering and empowering them to make a great decision. It has guided them what they need to do in the 2024 big dance. All student loan holders or borrowers have something to show at the polls. The middle-class income folks should give thank to the recent SCOTUS’ ruling. It may seem to be worse-off in the short-run, but better in the longer-run. Facing challenges will not make one to be weaker, but otherwise. With these analyses, one can conclude who will lead the executive branch after the election is over. She or he does need to wait till next year to know the results.