Featured News

More Articles  Printer Friendly Version

 
Featured News    Financial Briefs    Market Data Bank    Articles Of Interest    

GDP Rose More Than Expected; Stocks Top Record Again

U.S. real gross domestic product (GDP) increased at an annual rate of 2.1% in the second quarter of 2019, according to the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1%, but many forecasts had expected GDP to decelerate more sharply.

As recently as Thursday, the GDPNow forecast designed by the Atlanta Federal Reserve Bank, some of the world's best economists, updated its growth projection to 1.3%. To be clear, the Atlanta Fed's real time forecast of 1.3% on Thursday underestimated the actual rate of growth announced by the government on Friday morning by 60%! An independent real-time projection by the New York Federal Reserve Bank, for 1.5% growth, also sharply underestimated actual second quarter growth of 2.1%.

Consumer spending — which accounts for 70% of U.S. economic activity — fueled the confounding growth. Personal consumption expenditures spiked.

Despite declines in two of the four factors in U.S. growth — net exports and business investment — the surprising surge in consumer spending drove GDP to grow faster than what generally had been expected.

With the expansion entering its eleventh year, signs of slowing growth have spurred worries about a recession, but stocks have climbed anyway, as the strength of consumers surprised even the Fed's brightest minds, propelling continued economic growth.

The Standard & Poor's 500 stock index of large public companies, this week once again, closed above the previous all-time closing high on Friday, ending the week at 3,025.86.

With slowing growth, the months ahead could bring a dramatic pause in the record-long expansion. Profit estimates on the S&P 500 may need to be lowered by Wall Street, which could sour some investors on stocks. Expect volatility in stock prices during the deceleration in growth, but also be prepared for the expansion continuing, for the possibility that the Fed will get monetary policy right and manage strong crosscurrents; like a trade war with China, political uncertainty, and lower-than-expected inflation, and steer the economy toward renewed strength.


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.


Email this article to a friend


Index
Quarter Ends Well Despite Trade War, Inverted Yield Curve & Political Crisis
No Recession But A Slower Pace Of Growth
Fickle Financial Headlines Brighten
Economy Gets Bad Press Again
Europe's Growth Problem And Your Portfolio
A Prudent Perspective On Recent Volatility
A Tale Of Two Economies
Amid Worries, New Equity Risk Premium Data Explained
Slower Growth Confirmed By June Leading Economic Indicators
Stocks Closed At A Record High; Should You Worry?
Amid Record Stock Prices, Fed Policy Is A Risk
Pre-Retirees To Convert To IRAs More Often
Economic Facts To Prepare For The Elections
Protect Yourself Against Spearphishing
Economic Facts To Prepare For The Elections

This article was written by a professional financial journalist for Sattler Capital Management, LLC and is not intended as legal or investment advice.

©2022 Advisor Products Inc. All Rights Reserved.
© 2022 Sattler Capital Management, LLC | 9320 Wilshire Blvd, Suite 210, Beverly Hills, CA 90212 | All rights reserved
P: 310-593-0904 | F: 424-238-7277 | tsattler@sattlercapmgmt.com |
Disclosure | Contact Us | Home
Securities and advisory services offered through Royal Alliance Associates, Inc., member FINRA/SIPC and a registered investment adviser. Insurance services offered by Troy Sattler and tax services offered through Sattler & Associates, LLP are independent of Royal Alliance Associates, Inc. Sattler Capital Management, LLC is not affiliated with Royal Alliance or registered as a broker-dealer or investment advisor.

Representative(s) may not be registered to offer securities and advisory services in all states.