“The US stock market is enjoying the longest “bull market” in history.”
At the same time, risks to the bull market and the US economic expansion continue to rear their ugly heads. Much like mushrooms on a perfectly manicured lawn. Bull … mushrooms … ratatouille … this must be the SHI!
If you are new to my blog, or you need a refresher on the SHI10, or its objective and methodology, I suggest you open and read the original BLOG: https://www.steakhouseindex.com/move-over-big-mac-index-here-comes-the-steak-house-index/
According to the IMF (the ‘International Monetary Fund’), the world’s annual GDP is about $80 trillion today. US ‘current dollar’ GDP now exceeds $20.4 trillion. In Q2 of 2018, We remain about 25% of global GDP. Other than China — a distant second at around $11 trillion — the GDP of no other country is close.
The objective of the SHI10 and this blog is simple: To predict US GDP movement ahead of official economic releases — an important objective since BEA (the ‘Bureau of Economic Analysis’) gross domestic product data is outdated the day it’s released. Historically, ‘personal consumption expenditures,’ or PCE, has been the largest component of US GDP growth — typically about 2/3 of all GDP growth. In fact, the majority of all GDP increases (or declines) usually results from (increases or decreases in) consumer spending. Consumer spending is clearly a critical financial metric. In all likelihood, the most important financial metric. The Steak House Index focuses right here … on the “consumer spending” metric. I intend the SHI10 is to be predictive, anticipating where the economy is going – not where it’s been.
If the SHI10 index moves appreciably -– either showing massive improvement or significant declines –- indicating growing economic strength or a potential recession, we’ll discuss possible actions at that time.
We’ll get to our mouth-watering pricey eateries in a moment, but before you rush out this Saturday and spend $600 for that perfectly grilled NY strip at Ruths Chris, consider this:
Our economic state reminds me of a large plate of ratatouille: Across the landscape, we see a myriad of economic conditions, many very positive and many negative. Is the end near?
Naaa….go buy that steak. Enjoy. Sure, there’s plenty to worry about. But here are my thoughts:
OK…time for that steak! Apparently, lots of folks agree with me: This weeks SHI10 has improved significantly:
While a reading of negative 55 isn’t a barn-burner, it’s pretty good. Reservation demand in Seattle is near all-time highs, the OC SHI has turned positive, and even Philly has a ‘sold-out’ restaurant! Take a look:
Once again, the SHI10 is predicting continued strength in consumer spending and a solid GDP reading. Thanks for tuning in. See you next week.