What Slowdown?

While tariffs and threats about tariffs are being blamed for a slowdown in manufacturing indexes, job and earnings growth, lagging auto and home sales etc etc, it is entirely possible that weather is the real culprit. Stocks have swooned off highs and the bond market is acting like the next recession is upon us, but a consistent factor mentioned in earnings conference calls lately is weather. Some companies are referring to the fact that their deliveries through and to the midwestern US were severely hampered in the last few months, depressing earnings. In our office, we waited an extra month for delivery of two replacement windows this spring. Andersen Windows is not alone.

The media have carried stories about towns along rivers having no access to the other side of the river without engaging in a 2 1/2 hour drive to a higher bridge, and other towns completely losing their tourist populations this spring. Likewise, farmers are underwater, literally.

It is possible that the slowdown that we see now will be repaired as the year moves forward. Should that be the case, look out for a foray upwards in yield on bonds, and possibly, a re-establishment of the bull market in stocks.