Dear valued client,
Markets rose roughly 2% this week as data on both the demand and supply side of the economy rolled in.
Attention this week was focused on reports from the Institute of Supply Management (ISM) in regard to the health of manufacturing. The data came in higher than expected. This is both good and bad news, as is the trend lately. It is good news in the sense that the supply side of the economy is robust and the economy on the whole is not nearing a recession for the time being (as many pundits have been lamenting relentlessly). It is bad news in terms of monetary policy as the Fed will likely take a more hawkish stance on interest rates in their next meeting (March 21-22). Recent numbers coming in from China are also promising as the country is returning to its path of productivity following its recent domestic issues. This is good news for global markets.
As mentioned above, the supply side of the economic equation is healthy. Given the earnings reports from Target, Dollar Tree, and Lowe’s, the demand side of the equation remains equally healthy for the time being as consumers are maintaining their level of spending. Additionally, the labor market remains strong as initial jobless claims for the week came in at 190,000 – its seventh week under 200,000.
Investors will continue to monitor consumer behavior, inflation data (more coming next week), and how Central Banks intend to deal with the bind it is in. Very optimistic news will likely be needed to catalyze the next bull run.
I’d like to share a passage from Nietzsche’s The Joyous Science (1882), in which he draws attention to the painful, yet necessary mechanism for proper personal growth. Just as the deadwood in the forest needs to burn away for nature to be rejuvenated, we need to let the lesser parts of ourselves die in order for our character to flourish.
The passage reads as follows;
What Does It Mean to Live?
To live – that means: to continually slough off something of ourselves that wants to die; to live – that means: to be cruel and implacable to all that is old and feeble in us, and not only in us. To live – then doesn’t that mean: to be without piety towards the dying, wretched and the old? Always being a murderer? And yet old Moses said: ‘Thou shall not kill!’
What are the parts of you that want to die?
Have a terrific weekend,
PW
