Markets & Economy
Two Market Indicators Flash Red
Consumer, Profit Forecasts Go Negative
Chuck Carlson, CEO of Horizon Investment Services, returns with a clear-eyed assessment of the market’s confusing rebound and what might lie ahead. While headlines buzzed over April’s “Liberation Day,” Carlson argues markets had long since priced in tariff news and were already pivoting to earnings data and forward-looking sentiment. With corporate profits holding up for now—but signs of a slowing economy mounting—he cautions that second-half softness could come as no surprise to forward-looking investors.
Carlson walks through the engines that really drive markets: inflation, interest rates, and especially profits. His concern is that inventory overstocking and tariff avoidance may have artificially pulled demand into the first half of the year—masking cracks in Gross Domestic Product (“GDP”), labor softness, and the potential for earnings to disappoint just as the market looks most complacent. He’s also watching key economic signals like the Dow Transports and wage inflation, both of which are showing warning signs.
Despite the risks, Carlson highlights where opportunity still lives. He points to utilities and energy—sectors historically defensive but now benefiting from secular growth stories like Artificial Intelligence (AI) infrastructure and global supply-demand imbalances. For investors overwhelmed by all the noise, Carlson’s approach offers clarity: focus on companies with consistent earnings, reasonable valuations, and long-term durability.
Charles B. Carlson, CFA
CEO & Portfolio Manager of Horizon Investment Services
Investment Visionary, Seasoned Asset Allocator
Charles B. Carlson is a veteran investment adviser with over 25 years of experience in retirement planning, asset allocation, and portfolio management. He is CEO of Horizon Investment Services (CRD #110642), a proud member of the WorthNet partner adviser network.
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Last Revised: July 31, 2025
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