Good Morning,


All of us here wish you and yours the very best of the Memorial Day weekend break. While it is seen as the official start to the summer season, it is also a time to remember what created the foundation of our Freedom.  The words “freedom is not free” often tend to slip off the tongue with ease.


That is until you gaze upon an image like the one above or a video like the one below.


We get so busy with life sometimes that we may overlook how so many gave up theirs to protect ours.  Let’s agree we won’t forget.

We wish you the best of the summer kickoff…and for all those who have served, we thank you.


We close out the week and the summer season begins with a rather steady process underway in the economy.

Data is generally positive and jobs are solid.  Indeed, jobless claims are severely depressed – and the flip side of that coin is even better.  Job openings are at record highs.

Hence, all those kids you keep hearing about leaving college with a lot of debt should have plenty of offers to go to work – and begin shedding that debt quickly.


It’s called planting seeds for the future….or Armageddon XXVIII if you prefer the scary lane:

On a non-seasonally adjusted basis, jobless claims actually rose slightly from 207K up to 209.8K. We can overlook that tiny increase because this week’s level was still more than 100K below the average for the current week of the year dating all the way back to 1973!


Note corporate profits are up nicely in the latest data updates above.  Durable goods look negative at first glance – but they are not.  Check the revision to last month’s reading -they tripled the growth rate!


It’s Global


The good news is our US-based global companies are now able to capture benefits from what is a slow but steady recovery process on a global scale.  As it usually the case, the US leads it – but the rest of the world is also coming around.  Not every spot is perfect, but green shoots are appearing on the horizon nicely.


Let’s get a few data points from Dr. Ed and his team:


The rapidly improving and upbeat outlook for 2018 earnings isn’t happening only in the US.  A quick review shows that the consensus expected earnings estimates are actually rising for both 2017 and 2018 overseas as well.  As a result, forward earnings (in local currency) of the All Country World ex-US MSCI rose in mid-May to the highest level since November 2008!


To help tide us over from fears about a summer swoon – which should begin to roll out soon on all financial media channels, the latest batch of global economic indicators shows plenty of slow but steady growth, with some even better-than-expected numbers out of Europe.  You remember Europe right?  It was the Armageddon topic for most of 2015:


The Eurozone C-PMI (56.8), M-PMI (57.0), and NM-PMI (56.2) all were all strong in May.


In the US, the C-PMI (53.9) recovered some ground that was lost at the start of the year, led by the NM-PMI (54.0), while the M-PMI (52.5) fell for the fourth month in a row.


Japan’s M-PMI (52.0) edged down in May, but has exceeded 50.0 for the past nine months.


On the GDP front – note the data above as we got the second review of Q1 – and it popped up a bit as expected.  The latest y/y growth rates for Q1 real GDP for the UK (2.1%), Eurozone (2.0), US (1.9), and Japan (1.6) suggest that the global economy is enjoying global synchronized growth that is nicely sandwiched between a boom and a bust.


Heck, even Germany is getting a boost from the months of a week euro.  May’s German Ifo Business Confidence survey leapt to the highest reading in the history of the survey going back to 1991.  It was led by the current situation index, which also rose to the highest on record!


The Bottom Line?


This is a long train.  Success demands patience and discipline in this game.


Don’t expect every week, month or quarter to be perfect.  It won’t be – and that is a good thing.


Summer is here.  Get ready to hunker down – and expect some boredom to begin edging into the picture.


Don’t forget the back-drop as chatter about summer swoons will also enter the picture soon.


Steady as she goes friends.


Think demographics – not economics.


Just off the bow is the USS Summer Haze and often, hidden in the noise, opportunity arises.  We will be looking for same.


The doldrums ahead may be sloppy – but they will cause too many to fear the wrong outcome – and that is good for the long-term investor.


Enjoy the beach and time with family – be well and travel safe please.


And to everyone in the greatest military force on Earth – we thank you and honor you this weekend.


Until we see you again, may your journey be grand and your legacy significant.