A Little Overcooked: Today’s Economy Could Use A Slight Cool-Down
Investment Perspectives: Q2, 2023
Chief Executive Officer, Founder
Todd Sixt is the CEO of Strait & Sound. He is a successful and seasoned leader of financial service teams. His focus is to ensure Strait & Sound’s clients are provided with a first-class experience and that the work delivered by our people is unsurpassed in the financial services industry. At his core, he believes in excellence.
Its summer, 2023 and COVID has pretty much abated. This means people can now do things they haven’t done in years. Birthday parties will be held outdoors with no masks required. Picnic baskets will grace the lawns of local parks. And my personal favorite: friends and families will get together for backyard barbecues. I enjoy walking through my neighborhood in San Francisco and smelling all the delicious food being prepared.
In fact, barbecuing is an almost perfect metaphor for our economy today. Every backyard grill-master knows you don’t want to overcook your meats. Today’s economy could, in fact, be on the edge of overdone. I see nothing to really worry about. But my colleagues and I are watching this situation like a BBQ master tending the fire, to keep the temperature just right. If you’re concerned about an overcooked economy, here are my perspectives.
The Geo-Political Landscape
As I write this in June of 2023, the war in Ukraine has stretched into its sixteenth month. What was supposed to be a quick victory for Putin’s forces has turned into a protracted back-and-forth, as both sides gain and lose territory. With the Wagner group’s rebellion, one cannot help but feel Putin’s grip on power loosening, which could mean a much faster end to this conflict. A free and democratic Ukraine, especially a victorious one, could be a great thing for the global economy. Trade relations could quickly resume across Europe and global food and energy supplies could be improved. Should a day come when Ukraine declares victory, expect global markets to soar accordingly.
Domestically, we find ourselves in another election cycle as the 2024 presidential election season kicks off in earnest. It’s often entertaining to hear how Republicans and Democrats try to prove they’re the best choice for the American voter. But the Republicans will have a very interesting decision to make if Donald Trump gets locked up in all the litigation battles that loom on the horizon. Time will tell how all of this shakes out.
For the first time in many years, labor is once again making headlines. The tech sector has seen some sizable layoffs as organizations seek to implement cost-cutting measures. In Hollywood, both the WGA (writer’s guild) and SAG-AFTRA (actor’s guild) are on strike at the same time. This hasn’t happened since 1960. Some analysts are predicting a spread of labor disputes to other industries. My sense is that most of these disputes will be relegated to industries where the gig economy has short-shrifted the workers doing the work. Even with these events, U.S. employment remains strong.