Forecast
The Yield Curve Meets Microsoft Excel
To our surprise, the measure that most closely correlated with real-GDP growth on a one-year time horizon is the rarely mentioned Treasury spread for the 5-Yr./3-Mo.
“Plotting” The Course For 2022
The economic expansion officially entered its 22nd month in February. In dog years, that translates to an age of 13—the same age the recovery might have reached this July if not for the COVID disruption. The late-cycle characteristics displayed by a recovery that’s statistically so young dissuade us from issuing a high-conviction forecast for 2022.
Beware The Hot Air...
Mask mandates are back in vogue, and it’s investors who should be the first to welcome them: They’ll protect us from January’s blast of “thermal pollution,” when Wall Street prognosticators expel large volumes of hot air with prophesies for the new year. We have no problem with the exercise—so long as full-year forecasts (including one’s own) aren’t taken too seriously. “Forecasts are for show,” Steve Leuthold would always say.
A “New-Era” Look At The Future
Young readers sometimes give us a not-so-subtle roll of the eyes when we discuss any sort of stock market history that occurred before their date of birth, but it takes experience to appreciate that “there’s nothing new under the sun—least of all in the stock market.”
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