Quarterly Real U.S. GDP Growth

The estimates for second quarter GDP growth range from −20% to −51%, with the average from the Blue Chip consensus data being −35%. In the midst of the double effect of the COVID-19 shutdown and protests in many cities around the United States, the economy is struggling to re-open in the various stages defined by local and state governments. Equity markets have shown optimism for rebounding earnings—assuming a significant ramp-up of demand this summer.

U.S. & World Equity Indexes; 6/1/20; YTD Return S&P 500; 3,055; -5.42% Dow Jones Industrials; 25,475; -10.73% Nasdaq Composite; 9,552; -6.46% Shanghai Composite (China); 2,915; -4.42% S&P BSE Sensex (India); 33,303; -19.27% Nikkei Stock Avg (Japan); 22,062; -6.74% CAC 40 (France); 4,763; -20.33% DAX (Germany); 11,586; -12.55% FTSE 100 (U.K.); 6,166; -19.43%
Selected Interest Rates; 6/1/20; 4/29/20 15-Year Mortgage; 2.62%; 2.77% 30-Year Mortgage; 3.15%; 3.23% 5-Year Treasury Bond; 0.31%; 0.36% 10-Year Treasury Bond; 0.56%; 0.63% 30-Year Treasury Bond; 1.46%; 1.24%
Key Economic Statistics; Most Recent; Prior Month National Producer Price Index; -1.30%; -0.20% Consumer Price Index; -0.80%; -0.40% Unemployment Rate; -14.70%; 4.40% ISM Manufacturing Index; 43.10; 41.50 ISM Services Index; 41.80; 52.50 Change in Non-farm Payroll Emp.; -20,500,000; -701,000 New York State Consumer Price Index - NY, NJ, CT; -0.50%; -0.20% Unemployment Rate; 14.50%; 4.50% Empire State Manufacturing Survey; -48.50%; -78.20%

ISM Manufacturing Index

As expected, the ISM manufacturing survey continues to fall below the recession balance point of 50%. There was a small uptick in the data for May, indicating what might be the bottom of the production side of the economy. Much depends upon a successful containment of the COVID-19 pandemic and reopening of businesses in most states. Trade issues with China will continue to keep uncertainty high in the manufacturing sector.

Equity Market Statistics; Most Recent; Prior Month Dow Jones Industrials; 6/1/20; 4/29/20 Dividend Yield; 2.79%; 2.82% Price/Earnings (12 Mth Trailing); 19.41; 19.47 Price/Earnings (Projected); 21.66; 16.24 S&P 500 Index; 6/1/20; 4/29/20 Dividend Yield; 2.03%; 2.34% Price/Earnings (12 Mth Trailing); 23.17; 23.17 Price/Earnings (Projected); 21.83; 16.18

The information herein was obtained from various sources believed to be accurate; however, Forté Capital does not guarantee its accuracy or completeness. This report was prepared for general information purposes only. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities, options, or futures contracts. Forté Capital’s Proprietary Market Risk Barometer is a summary of 30 indicators and is copyrighted by Forté Capital LLC. For further information, visit www.fortecapital.com, send a message to [email protected], or call 866-586-8100 and ask for David W. Henion, CPA, or Larry H. Rabinowitz, CPA/PFS.