In this week’s The Glass Half Full, Carson Group’s Ryan Detrick, Chief Market Strategist, and Sonu Varghese, Chief Macro Strategist, tackle the big question everyone’s asking: How is the economy really doing? They start with the good news: Nominal GDP growth running around 6% annualized, well above the 2010-19 trend of 4%, which is ultimately what drives corporate profits and stock prices.
Ryan walks through a strong Q2 earnings season, where 10 of 11 S&P 500 sectors posted positive year-over-year earnings growth and all 11 grew revenue, with earnings coming in well above initial expectations. They highlight the unemployment rate falling to 4.1% in July, the lowest in a year, as the single best gauge of consumer health, while explaining why monthly payroll numbers have gotten noisier due to a lower breakeven job-growth threshold tied to reduced immigration. They also point to encouraging signs under the surface: falling foreclosures and delinquencies, near-record-low jobless claims, and record household wealth from a stock market that’s nearly doubled since 2023.
On the flip side, Sonu flags sticky inflation as the main worry, with core CPI running around 2.5-2.6% annually and the Fed’s preferred PCE measure closer to 3%, alongside higher yields weighing on a frozen housing market. They close by reiterating their base case: an economy that’s fundamentally fine, a stock market near all-time highs, and a labor market that could improve further in the back half of the year.
Key Takeaways
- Nominal GDP growth is running around 6% annualized, well above the 2010-19 trend of 4%, and remains the key driver of corporate profits and stock market gains.
- Q2 earnings season was strong across the board: 10 of 11 S&P 500 sectors grew earnings year-over-year, all 11 grew revenue, and results came in well above the roughly 23% growth expected five weeks earlier.
- The unemployment rate fell to 4.1% in July, the lowest in a year, which we view as the best single indicator of consumer and labor market health, even as monthly payroll figures look noisier due to a lower breakeven job-growth threshold.
- Inflation remains the top concern, with core CPI near 2.5-2.6% and the Fed’s preferred PCE gauge closer to 3%, alongside higher yields that have left the housing market largely frozen.
Jump to:
0:00 — Welcome and the Big Question
0:23 — The Good News in Growth
1:17 — Earnings Strength Beyond Tech
2:49 — Unemployment as the Key Signal
3:53 — Why Payroll Numbers Look Noisy
5:06 — Claims Data and Housing Cracks
6:19 — Household Debt Trends Quietly Improve
7:06 — Inflation and Higher Yields Risks
8:11 — Market Wave and Closing Takeaways
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
The views stated in this podcast are not necessarily the opinion of Cetera Wealth Services, LLC, or CWM, LLC. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Ryan Detrick and Sonu Varghese are non-registered associates of Cetera Wealth Services LLC.
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