We are now past the nine-month mark and coming around the turn for the year end finish of 2017. The cacophony emanating from Washington has almost overwhelmed the listening capacity of most investors. Thankfully, those who work for and manage companies here and abroad have been able to focus their efforts on corporate progress. Distractions are abundant – but business is “being done”.
We have noted in past writings that the Service Sector of the US economy (and we believe the Eurozone) makes up about 70% of total Gross Domestic Product (GDP). So, the Service Sector primarily determines the health of the overall economy. As can be seen above, the Service Sectors in America and in the Eurozone are quite healthy – ergo, so are the overall economies, as we live during a period of synchronized world economic growth.
Further, small business optimism is at a high level, as can be seen above. Small businesses are drivers of most US economic growth. They are the creators of many more jobs than either large companies or government. They are run by the entrepreneurs who create new industries. If small business optimism is high then people get hired, people spend money and the American economy moves forward.
These are but two “snippets of information” which encourage us. Despite the rancor expressed in certain corners of our world, business is “being done”. This heartens us to believe that there are fundamental underpinnings to “full” stock market valuations. While “Mr. Market” has traveled far, his footsteps have not been on just “thin air”.
The opinions expressed in this Commentary are those of Baldwin Investment Management, LLC. These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed.
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