Contrary to the media headlines, the fundamentals of the United States economy, and consequently U.S. stocks, are outstanding. The global oil price and elevated yields on longer-dated U.S. Treasuries are distractions.

The latest information on the state of the economy is extremely positive. The Federal Reserve Bank of Atlanta projects GDP growth for the current quarter at 4.8%. Moreover, the Institute for Supply Management’s August survey of the U.S. manufacturing sector produced a strong reading of 54.6, the second highest since 2022. With that report, the manufacturing sector has now expanded for eight consecutive months. The labor market also remains healthy and resilient. Unemployment claims are running at historically low levels. The ADP survey of private-sector employment, released on Sept. 2, showed that American businesses continue to add jobs.