Cause to Be Cautiously Optimistic about US Equities
My cautiously optimistic view comes with two caveats. First, in today’s slow growth world, it won’t take much to knock the US economy off of its trajectory.
Corporate profits from current production, including inventory valuation and capital consumption adjustment, rose by $47.5 billion in 2Q15.
The benchmark-tracking SPDR S&P 500 ETF Trust gained 2.47% on August 27, as the US Bureau of Economic Analysis came out with its second estimate for the 2Q15 gross domestic product.
The FOMC’s report on growth in the US economy showed that it had contracted 0.2% in 1Q15. In light of increased retail activity, the staff of the Federal Reserve expected economic growth to gain pace in the second half of the year.
Global stocks could be more volatile going forward due to slowing global growth. The IMF expects advanced economies to grow by 2.1% in 2015 compared to the estimate of 2.4% in April.
The BEA (Bureau of Economic Analysis) released its advanced estimate of 2Q15 US economic growth on July 30.
Second quarter GDP growth in the US fell short of market expectations. The two key factors restricting GDP growth in the US are decline in oil price and the strengthening US dollar.
The advanced estimate shows that GDP expanded by 2.3% in the second quarter of this year. In 1Q15, real GDP in the US increased by 0.6%.
The United States could benefit from longevity in a big way if the graying population is treated as an asset and proper policies are put in place.
Projections from the IMF say Canada’s economy will grow by 1.5% in 2016, 0.7% less than it projected in April. In 2016, however, Canada’s economy is expected to grow at a 2.1% pace.
While the CPI is a measure of inflation in consumer prices, the ECI gives an indication of whether employment costs are rising or falling by measuring inflation in wages.
The Yellen Index is a mix of economic indicators that the Federal Reserve chair has referred to as important considerations for policymakers and employment and inflation indicators .
Population trends suggest that the labor force participation rate is likely to fall for people aged below 55 years in the US, while it is set to rise for older age groups.
In the US, we would see a better GDP growth rate in 2Q15—compared to what we saw in 1Q15. However, the rebound is expected to be moderate.
Headline data hasn’t been great, but the economy is actually stronger than it appears. The US GDP contracted in 1Q15, but that doesn’t tell the whole story.
During the fourth quarter last year, corporate profits dipped by $30.4 billion. In the first quarter this year, profitability was weighed down by the stronger dollar.
The US Bureau of Economic Analysis will be releasing an advance estimate of gross domestic product for the second quarter of 2015 on July 30, 2015.
South Korea was the largest net buyer in April, purchasing US securities worth $4.6 billion. Meanwhile, Belgium was the largest net seller, letting go of securities worth $23.9 billion.
Of the three composite indices, the leading economic index is most important because it portends to indicate what’s going to happen in the future.
Industrial production is an important indicator of economic health. If industries aren’t doing well, it signals inherent weakness in the economy