From the desk of Willie Delwiche.
On the heels of last week’s surprising drop in the University of Michigan Consumer Sentiment index, we are now seeing a similar decline in the Future Activity Index from the Philadelphia Fed. Just two months removed from a multi-decade high, this index has undercut its post-Covid lows and is now at its lowest level since late-2019. The 2-month decline is the largest in more than 50 years. Not only is current economic data falling short of expectations, but prospects for future growth are also being revised lower. This comes at a time when earnings expectations are still being pushed higher, valuations have swelled and investors remain all-in on equities.
