Malibu Chicken

My favorite hobby at age 13 was the art of eating. I was quite good at it and nothing made me happier then waking up Saturday morning… and not because it was the weekend…but because it was the day of the week that my family went to our neighborhood Sizzler restaurant!

During this Saturday night ritual, the crispy Sizzler toast, giant steak fries and all you can eat Malibu chicken (fried chicken patty topped with ham and Swiss cheese and smothered with their famous mustard/mayonnaise sauce) was my go-to each and every time.

Although this glorious all you can hot bar included a generous all you can eat salad bar, I never visited that side of the buffet. I did, however, pass by on my second and third trips to get more Malibu chicken.

On the drive home I was always beyond full and proud of myself for eating so much in one sitting. Once I got home, it was always a different story… my pride was replaced with regret as my stomach began to churn and ache and my mom would always say the same thing, “Taylor, I told you not to eat so much Malibu Chicken!”

The Saturday night lag effect from anticipation to eventual indigestion reminds me of the relationship between the Stock Market and the Economy. In early March of this year, the US economy was doing well, while the stock market was struggling, and now the opposite is occurring, the economy is struggling, but the market has improved remarkably.

The reason for this is that the stock market is what’s known as a leading economic indicator. A leading economic indicator is a measure of economic recovery that shows improvement before the actual economy does.

Stock prices are forward-looking in the sense that investors buy and sell stocks not based on what happened yesterday or what is happening today, but rather based on their expectations for the future. An individual stock is priced in large part based on investors’ expectations of what is coming in the next several months and quarters. Collectively, the S&P 500 is priced in a similar fashion.

As of late the behavior of the stock market is suggesting improvement for our economy by year’s end. If I was explaining this upturn in our economy to my 13- year-old self, I would say it like this…

“Get ready because soon we will have family dinner night at Sizzler again!” I would also add, “Taylor, don’t eat too much Malibu Chicken.”

Any opinions are those of Taylor Easley are not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.