This Says Stocks Higher, Rates, Back to School Data...
Here's the data...
Today's Data
• Leading Indicators Suggest Strong Stocks.
• Why Rising Rates Has Not Made the Dent Most Assumed.
• Good Start for Duolingo's ABC App.
When Leading Indicators Go From Low to Little Higher, Here's How Equities Perform.
The markets are currently grappling with determining where rates will settle, assessing the health of the economy, and speculating on the duration of the current situation.
Our approach aims to distill various factors, drawing upon both logical reasoning and historical trends as guides. The economy remains robust. Although leading indicators of economic activity have waned over the past year, the overall health of the economy has been maintained. Recently, we've observed an uptick in these leading indicators. As history and the chart above suggest, such a trend typically leads to a new phase of strength in equities. Will this occasion follow the same pattern? It's impossible to predict with certainty. However, it's worth noting (and something we have spoken about for a while) that company balance sheets are primed to handle a potential economic downturn through cost-cutting measures. If the anticipated economic slump doesn't materialize, this could lead to higher profit margins and earnings than many anticipate. Only time will tell. We will be watching!
Over 90% of Mortgages are Below 5%
The housing market has also remained resilient despite the quick move in interest rates. Rising rates have historically led to pain in the housing market, but this time is much different.
The reason is in this chart. Most homeowners who have a mortgage are locked into rates much lower than the spot rates seen today. This is a good example of thinking through a hypothesis fully. Many 2 years ago suggested that housing prices would collapse due to rising rates. This was not only untrue, the opposite actually took place.
Kids at Back in School as Duolingo ABC App Surges to Top 5.
Duolingo is not only for language learning but also for reading. We monitor various apps during seasonal periods to gauge shifts in market share. Duolingo, best known for its primary language learning app, has another app designed for young children learning to read. This year, we've observed a significant surge in downloads at the beginning of the year—a promising start.
Avory Owns Duolingo at the time of this writing.
Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.
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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.