Key Economic Concerns: Twin Economies Emerging
Amid record highs in the stock market, Charles Sizemore, Chief Investment Strategist at The Freeport Society, warns of a diverging economy. While key tech stocks like Nvidia are thriving, blue-collar workers are facing stagnation with manufacturing contracting for five consecutive months as of July. Additionally, consumer credit card debt has surged by 30% since 2020, alongside rising delinquency rates, now the highest since 2012.
The Conference Board’s Leading Economic Index (LEI) has triggered a recession signal for three consecutive months, indicating potential economic slowdown. In June, nine of its ten indicators were flat or negative, with only the S&P 500 showing positive movement. Meanwhile, core inflation rose by 3.1% last month, exacerbating the financial strain on households.
Sizemore advises investors to remain cautious yet strategic, focusing on resilient sectors, particularly within the AI economy. He highlights the importance of hedging against potential downturns by maintaining investments in gold and Bitcoin.
