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Today, we share a note from The Observatory. The Observatory is how we at Prometheus monitor the evolution of the economy and financial markets in real-time. The insights provided here are slivers of our research process that are integrated algorithmically into our systems to create rules-based portfolios.
Our primary takeaways are as follows:
- Motor vehicle sales increased recently, driven by declines in production and inventories.
- Increasing motor vehicle sales are consistent with broader strength in nominal activity and robust business cycle conditions. Looking forward, we expect the motor vehicle complex to remain stable.
- Relative to these expectations, equity markets continue to have price-earnings outcomes consistent with a continued acceleration of growth. Without a significant divergence between price and fundamentals, odds continue to favor equity gains. Our strategies continue to maintain long exposure to equities.
You can read all the data and analysis driving this assessment in the link below. Until tomorrow.