"Strong" Q2 GDP Growth Not Actually As Robust As It Sounds? | New Harbor Financial

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**John Lodra** (0:57)
It's not to say the economy is dead and dying, but the headline number is absolutely being influenced by this massive noise and policy shock to the import situation. We actually saw, at least on the first reading, a reduction in investment. Many of the categories were rather stable for the quarter, but all to say is that the reading in and of itself is probably not as optimistic and to be cheered about as one might think.

**Adam Taggart** (1:37)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcome you here back for the end of the month recap that our partners do for us at New Harbor Financial, one of the endorsed financial advisory firms by Thoughtful Money. I'm joined as usual by lead partners, John Lodra and Mike Presson. You see them with me on this channel every week, but as we've started doing a couple of months ago, we like to give these boys a chance to give kind of a, pull back a little bit, give us a full recap of what's happened over the month and what's going on in terms of their outlook of the markets and any changes that they're making to their portfolio strategy. So John and Mike, thanks so much for joining us today. John, you prepared some slides, so I think I want to start with you here, but just to sort of set the table, stocks have continued their rally. We've had one of the longest rallies in the S&P on record, and the day here we're speaking, we've had two quite positive reports come out.
We had the GDP report come out, came out at 3 percent, substantially higher than the 2.6 percent that was expected. Definitely a big change from the negative print we saw in Q1. So quite a strong number here for Q3, at least on the headline, sorry, Q2, at least on the headline. And they also revised the Q1 loss by, they revised it upward a bit. It was still a negative quarter, but not as deeply negative as what the previous prints were. We also saw on the ADP jobs report that that came in stronger than expected as well. That came in at I think 104,000 net new jobs. It was up from the 76,000 number that was expected. So about an hour after we finished recording here, gentlemen, we're going to receive the latest release from the Federal Reserves Open Markets Committee and then Jerome Powell will come out and speak to give his remarks. Seems extremely unlikely at this point that the Fed is going to do anything other than just hold Pat here, given that the economy seems to be doing just fine by these headline numbers. There doesn't seem to be any sort of real weakness the Fed could point to to say, hey, this is a reason why we should step in and start cutting. But anyways, I'd love to hear your gentleman's thoughts on that. So I guess, John, let's start with you.
What do you take? I mean, is this kind of the bulls just saying, hey, yeah, everybody, the water's fine, just jump in the pool and have fun.

**John Lodra** (4:11)
Hello, Adam. Great to be with you and your viewers here today. So we're just about to end July. As you already pointed out, we have some news today that's pretty noteworthy. But yes, we have seen an historic run in markets here, higher from what felt like a really scary point in April with stock selling off. We had a technical bear market register in April. We'll dive into much more of the nuance and context of the stock market rally since then as we go throughout this talk. The punchline though is we've had a very broad-based and very powerful rally. There's no imminent signs that that's about to suddenly change. But we are seeing some stalling, some tiring, and some extensions of some of the very broad indicators that have fueled much of this rally. We'll talk about that in depth.