Tipping Point: Time to Cut Risk Podcast

Please listen to our weekly podcast summarizing our August 2nd note and consider becoming a paid subscriber, if you are not already, to read the full report. If you are a recent subscriber and would like a 30 day trial, please email me at [email protected] A lot has gone right for US equity investors in 2019 and until now, other than a tactical call to reduce global risk in May; we have remained steadfastly bullish on US equities.  2Q19 earnings were exceptionally strong relative to expectations, but reporting season is effectively over.  Consumer spending followed our ‘Echo of ’87 and now ’88 analog and came roaring back, however peak momentum of the recovery was in May.  The Fed delivered a 25bp cut and early end to balance sheet contraction as we expected.  We viewed the cut as unnecessary and unlikely to boost inflation and while we believe fundamentals justified the rally in equities, clearly expectations of easier policy contribution to the rally in July.  Though 10% tariffs on $300 billion of Chinese imports are the type of ‘global development that could turn a ‘one and done’ into three rate cuts, easier Fed policy is unlikely to improve business confidence enough to offset the implications of escalation in the Trump Trade War.   Barry C. KnappManaging PartnerIronsides Macroeconomics LLC908-821-7584https://www.linkedin.com/in/barry-c-knapp/@barryknappThis institutional communication has been prepared by Ironsides Macroeconomics LLC (“Ironsides Macroeconomics”) for your informational purposes only. 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