When is a "Deal" Really Just a "Framework" (Or Sham)?

The trade “deals” aren’t finalized and face numerous obstacles

Highlights

• The trade “deals” aren’t finalized and face numerous obstacles

• Our survey-data-based model forecasts flattish Q3 growth

• The price-to-sales ratio for U.S. equities is at a 34-year high…

• … as indicators of speculative trading surge

Key Takeaways

• Equity Markets Surge Despite +1% Growth: Everybody has been lulled into this belief that the business cycle has been repealed. Meanwhile, nobody seems to notice that the U.S. economy, so far this year, has slowed down to barely +1.0% growth at an annualized rate. As for the equity market, keep in mind that the S&P 500 price action has outstripped earnings growth by +1,000 basis points in the past year, where 60% of the market gain has been due to multiple expansion, not the profits stream (“investor animal spirits” and the revival of the FOMO trade at play).