Except for the Russell 2000, major stock market indexes continue to march higher, negating any fears of a slowing economy or otherwise.
Although the yield curve got out of its inverted state, low bond yields still suggest economic weakness.
Jobless claims remain at their lowest levels since 1969 and retail sales bounced back in March. But the economy is not overheating and economists state that the U.S. economy should grow by about 2% in 2019. With inflation also near 2% and the federal-funds rate just over 2%, the Fed is unlikely to do anything. Settling the trade dispute with China would also help both economies.
Many big U.S. banks reported optimistic earnings last week, driving the financial ETF (XLF) 2.6% higher, and many bank leaders told investors they see no signs of a recession. The sector trades at 12.2 times 2019 earnings, versus a 17.4 multiple for the S&P 500.
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