Growth has been solid this year. Consumers remain confident, and business continues to hire and invest. Indeed, markets have responded to these positive conditions, as they are once again close to new highs. If the economy continues to grow and the fundamentals remain solid, which is likely, we should continue to see more progress in the markets.

Happy Independence Day! Independence Day is actually one of my favorite science fiction B movies. It gave me one of my best laugh lines for speeches: “You remember the movie Independence Day—it started with aliens destroying Washington, DC. Later on, though, it turned out they were hostile.”

June was a great month for markets around the world, capping off a strong second quarter. With so many worries about slowing growth, earnings, geopolitics, and trade, why are we seeing such strength? The Fed’s more dovish comments at the June meeting had a lot to do with pushing markets up. Plus, the economic data—from retail sales to housing—is solid. For all the worry, things are actually pretty good.

There has been a great deal of coverage on slowing growth. Indeed, on this blog we have looked at signs that the recovery may be close to the end. What that means, of course, is that a recession may well be in the cards in the next couple of years. Although we are not there yet, now is a good time to take a closer look at what it could look like. After all, it has been more than 10 years since we last had a recession, and that one was not typical.

“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

As I kind of expected, some news did hit yesterday while my son and I were fishing that is definitely worth a closer look. The Conference Board’s survey of consumer confidence—one of the most underappreciated economic stats there is—dropped from 131.3 in May to 121.5 for June. This result is the lowest level since September 2017.

I spent this morning the way I usually do, reading the newspapers, looking at the economic reports, and scanning the futures markets. Also as usual, I found things to worry about: Consumer confidence, still high by historical standards, dropped more than expected in June, falling to its lowest level in almost two years. New home sales also missed expectations, declining for the second month in a row instead of climbing. The markets are down a bit as I write this . . . So far, so normal.

So much for sell in May and go away. The S&P 500 has hit another all-time high and is on track for the best June in more than 60 years (since 1955). New public offerings have exploded, with Beyond Meat and Slack the most recent wunderkinder. Companies are racing to go to the market. They know that with valuations at all-time highs and the risks rising, now is the time to sell at the best price they will likely get.

The market has concluded that the Fed’s decision to keep rates steady, along with the accompanying statement from yesterday's meeting, is unreservedly dovish. The expectation is for two more rate cuts this year, starting in July. Markets are, unsurprisingly, cheering. Lower rates are good for economic growth and for stocks. In fact, that reasoning would explain why the Fed would cut. If the Fed does cut, it will be stimulative and should help sustain the expansion—as intended.

This afternoon, I appeared live in studio on Yahoo Finance’s The Ticker to discuss today's Fed decision to leave interest rates unchanged. Listen in to learn more.