Last week was another lackluster one for the books. The US market actually shuffled along sideways until Thursday when the Institute for Supply Management (ISM) report came out. The ISM was not as bad as I suspected, but it was still not good with a continued increase in inventories. Increasing inventories means slow demand. In addition, the real market mover for the week was the abysmal jobs report released Friday that showed ZERO jobs added for August.
The Other Zero
The other zero very few are talking about is the zero chance that we are not in another recession. Quite frankly, I do not think the economy has ever really “recovered” from the last one. In my mind, a money printing corporate bailout with no job growth and a housing implosion does not make for a recovery. The reality is without the massive government intervention, we would be in a depression versus skimming along on the top of a recession with government life support, which cannot last forever. Did you know that every time GDP has been at or below 2%, the US has been in a recession? Currently, GDP is sitting at 1.5%.
With zero jobs added in August, unemployment still at 9.1%, and all the other headwinds facing the economy, it would not be surprising for the markets to fall further.
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John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals. For more information, visit https://www.chladekwealth.com.