Quantcast

Deep Value Dividend Growth Index Week 29 Update: Economic Growth Trajectory Falling And Tech Bubble May Have Burst

Posted On June 11, 2017 11:28 pm
By:

Click here to read up on the intro to this portfolio, the theory behind it, and its methodology.

Weekly Economic Data Review

So once again the economic data was mixed.

On the plus side, nominal, real, and per capital household wealth came in at a record high. Of course that doesn’t mean that inequality is shrinking, and in fact the majority of the growth was among the top 10%, which explains why economic growth isn’t faster given the kinds of asset gains we’re seeing.

Rail traffic was up in may, pointing to continued economic growth. In addition, earnings annoucements continue to be the best since 2012, in terms of top and bottom lines beating expectations.

The ISM (services index) came in at 56.9, which was both much higher than expected, and a strong sign that the service side of the economy continues to generate strong growth.

Commerical Real Estate prices also continue to rise strongly, which helps many of the REITs we own, as well as help to minimze the risk of defaults in this important sector of the economy.

On the downside wholesale orders declined by 0.2%, the fifth month of consecutive declines. The levels are now consistent with those of a recession, though the overall economic picture continues to point to a less than 10% chance of that in the next 9 months.

That being said, both the New York and Atlanta Fed continue to decrease their projections for Q2 economic growth.

New York Fed GDP NowCast: 2.3% for Q2 1.8% for Q3

Atlanta Fed GDPNow: 3.0% for Q2

So it appears that those waiting for increased optimism to result in an economic takeoff continue to be disappointed.

About author

Dividend Sensei
Dividend Sensei

I’m an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, Investorplace.com, and TheStreet.com.

My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 20 years of investing experience, I’ve learned what works and more importantly, what doesn’t, when it comes to building long-term wealth and income streams. I’m currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that:

1. Pays a 4% to 5% yield
2. Offers 9% to 10% annual dividend growth
3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

Related Articles