Boom! Jose's home run drives the Blue Jays to Kansas City for the ALCS.
Not so exciting times for the US Economy however, as it appears that slower than expected September retail sales and lower than expected inflation reports further indicate that the US is importing the global economic slowdown.
It was hoped that the US economy would lead the global economy through the 3rd and 4th quarters of 2015, but this hope appears to be fading.
Chinese and emerging economy weakness inclusive of currency weakness and US$ strength is exporting deflationary pressures into the US economy.
China is also at the heart of a commodities downturn that’s further weakening prices around the world. The slowdown in the No. 2 economy is colliding with increased supply resulting from efforts in the past decade by global mining and energy companies to boost production to meet what had seemed to be insatiable demand.
Meantime, China’s investment binge since the 2008 crisis has created overcapacity in capital-intensive sectors from cars to commercial buildings. And its August decision to let the yuan depreciate means less demand for foreign products and even cheaper shipments abroad if further currency weakness ensues.
This is making the US Federal Reserve's decision on beginning the normalization of interest rates even more difficult.
Meanwhile, Industrial production in the Eurozone rose only 0.9% year over year in August, slowing from a downwardly revised 1.7% in the previous month.
3rd Quarter earnings reports are front and centre over the next month and expectations remain negative for both this earnings season and for the 4th Quarter as well.
Based on the slowing economic growth and negative earnings, we just can't get excited about the outlook for equity markets.
So for a much more positive experience for the next few weeks, stick with cheering on the Blue Jays!!
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist