Growth Views
Dynamics In Slow Descent
Welcome to Prometheus Asset Allocation. The Prometheus Asset Allocation program offers a stable, macro-focused approach to asset management. Prometheus Asset Allocation aims to outperform a traditional stock and bond portfolio by leveraging our proprietary systematic macro process to rotate between 3 ETFs monthly (plus cash). As part of the program, we will be sharing our views on Growth, Inflation, and Liquidity in addition to our monthly video updates.
Our primary takeaways are as follows:
For the latest data through July, our systems place Real GDP growth at 3.91% versus one year prior, driven primarily by a sequential acceleration in Private Investment. However, upon zooming in we observe that most of this acceleration is attributable to current inventory dynamics which are volatile and not durable.
Furthermore, the cyclically sensitive components, particularly manufacturing goods, motor vehicle production, and residential investment remain weak relative to the broader economy. Manufacturing in particular will unlikely exit this weakness soon.
Overall, business cycle conditions suggest regime stability of a Slowing but Growing US economy. In the context of markets, our Asset Allocation strategy remains