Anatomy Of A Mid-Cycle Slowdown

Check out the accompanying pdf and chart collection. Executive Summary: Investors still have plenty to fear. But our earnings and economic data analyses plus recent stock market action tend to support our relatively constructive outlooks for the economy and stock market (especially relative to the fears). … Specifically, we think the S&P 500 likely hit its bear-market low of 3666 on June 16 and will remain range bound between 3666-4150 pending economic improvement; the peaking of inflation should limit further valuation downside. … As for the economy, we think it’s undergoing a mid-cycle slowdown that could flatten expected earnings growth—but not a conventional recession that causes earnings to tank.