Unemployment across America is at its lowest point in decades, job creation keeps chugging along, wages are up and stocks are closing in on their all-time highs.
Yet to some media voices, the economy is “literally coming off the rails,” as Chuck Jones said at Forbes, and is “weakening,” according to the New Yorker.
The wild clash of comments has developed as CNBC is reporting that those all-time highs for major stock indexes appear to be just around the corner.
“Stocks have rallied on expectations that the Fed should be cutting interest rates in the near future, and that President Donald Trump would stand down from his threat to put tariffs on Mexico, as he did on Friday. The Dow Jones Industrial Average and S&P 500 are both up more about 5 percent in June. The Dow is up for six-straight days and futures pointed to another big gain Tuesday,” the report said.
“I think it goes back to its highs. This would be a pretty quick recovery from a pullback. Normally, it takes about a month and a half to get back to breakeven. This could happen in less than half a month,” CFRA chief investment strategist Sam Stovall told the agency.
The report noted the S&P 500 was 2.3 percent off its all-time high of 2,954 through Monday’s close while the Dow was 3.3 percent from its high. Nasdaq was only 4 percent from its record.
Oppenheimer technical analyst Ari Wald told CNBC that the market appears to be heading for a “snap back.”
What still could provide a “bumpy ride,” however, is the run-up to the trade deal experts expect President Trump to reach with China.
The economic forecasts have been changing in recent days, with some now expecting as many as two Fed rate cuts this year.
Explained Julian Emanuel, chief of equity and derivatives at BTIG, “There are people who are talking about three or four rate cuts in 2019. That’s not going to happen.
“The market has to work off a little bit of that rate-cut exuberance. That puts a ceiling on stocks. Conversely, the fact the Fed is prepared to act and the fact the market responded favorably to the outcome with Mexico tells you there is a floor under stocks as well.”
Others are less positive.
At Yahoo, columnist Rick Newman conceded that while the underlying components of the Trump economy are looking up – including a strong growth in manufacturing employment – export growth is not what it could be, also citing a stock market that has “flagged.”
At Forbes, Chuck Jones said the economy is coming off the rails because of the indicators from the transportation industry.
“Neither railroad traffic nor the Index are doing well recently,” he reported. “The underlying economy is weaker than perceived when you look at March quarter’s GDP numbers and the recent employment report. And if the economy continues on this path it could enter a recession when few are forecasting one with one reliable indicator foreshadowing a downturn in the next 6 to 18 months.”
John Cassidy at the New Yorker said Trump “hates acknowledging negative developments,” but charged that a recent jobs report was a worrying sign of “softness” in the economy.
And, he noted, “Business surveys show that Trump’s tariff threats, particularly those directed at China, are creating a lot of uncertainty, which is reflected in businesses taking a cautious approach to spending and hiring.”
He pointed out the Federal Research also is watching, because of issues that remain unresolved.
But even that report confirmed, “Despite all the troubles and strife of his first two and a half years in office, he has been able to point to strong economic growth and a very low unemployment rate as reasons why Americans who aren’t enamored of him personally should support him.”
At mid-day Tuesday, the Dow was at 26,082, Nasdaq at 7,831 and S&P at 2,888, all up for the day.