1) Pres. Trump's Address was positive in tone, but still thin on detail. Expectations for tax reform to be implemented may have to be extended.
2) European economic data continues to show improvement. Manufacturing index is at a 6 year high.
3) US Federal Reserve member speeches suggest increasing odds of a March 15th rate increase (to 71%).
4) US January core Personal Consumer Expenditure Price Index (which the Fed targets) rose 1.7% over the last year (below the Fed's 2% target).
5) Consumer spending in January grew at a pace that was less than expected.
However, after inflation is taken into consideration, "real" consumer spending was significantly lower.
6) Although household incomes were better than expected.
In a nutshell, forecasts for 1st quarter US GDP will likely be revised lower.
That might not be a good combination: lower than expected economic growth, postponed tax reduction and the Fed raising interest rates.
But at the moment that does not seem to be phasing the equity markets.
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Scott Tomenson,CIM Managing Partner, Chief Investment Strategist