- Tech Capex continues
- Consumer doing okay
- Global Inflation at normal levels
- US Labor market softening further
- allows Fed, and other central banks to cut rates which should sustain capex at small/ mid-cap
Changes in any of the above could cause disruptions. Further weakness in US employment will accelerate rate cuts but could negatively affect consumer. Starting from Amazon, many companies started saying tariff’s are flowing into price, which could result in inflation. Commodities have rallied except Oil, expect Oil prices to go up, which could push inflation up 
1 Like
K shape recovery could imply consumer problems on the low end. Economy doing well so far on up leg. Down leg still a concern. Will govt efforts help consumers enough? Larger tax refunds. Lower interest rates. You wonder about recovery timing for lower leg. Unemployment from AI. Rising prices from tariffs.
How does this all work out?
Unemployment and tariff induced inflation have direct impact on consumer. Tax refunds are administration talking point, that is not going to matter beyond a month or two.
Now the data is showing hiring has stalled in 2Q, 3Q. With layoff’s picking up pace, this is a deadly combination. I expect the employment to get weak further. Of course, administration will downplay, mess with data, etc. President thinks he can hire 2 million federal workers and voila he can fix the employment issue… I am not sure whether to view that as naive.. or my long held fear of DOGE is a ruse to fire existing employees and then fill the ranks with right leaning folks.
Scary times indeed.