Quick Bite –US Growth Revised Up
In a sign of resilience, the US second-quarter GDP growth rate was revised up to 3.8%. Consumer spending was stronger than previously reported after figures on consumer spending were revised higher, growing at an annualised rate of 2.5%, compared with 1.6% in the previous estimate. The growth in GDP was up from 3.3%, though first-quarter growth was revised lower to a 0.6% contraction.
The upward revision was due to stronger than previously reported Consumer spending on Services, Business Investment and a modest bump to Government consumption.
Source: Daily Chartbook
The revised figures come a week after the Federal Reserve reduced borrowing costs for the first time this year, citing a significant slowdown in the labour market. Bureau of Labor Statistics figures showed the US economy created far fewer jobs over the quarter, with the non-farm payrolls data showing a decline in jobs in June.
Source: Daily Chartbook
Fed officials have signalled more rate cuts on the horizon, but have also said they will review economic data to decide on their next policy moves.
While the GDP data was unlikely to “move the needle on monetary policy” – it is backward looking, and the Fed is probably more focused on the health and risks to the labour market. The September employment report, out on 3 October, could influence the Fed’s next move.
Meanwhile, the S&P 500 index continues to break new ground.
Source: Evans & Partners
No surprise that net investor sentiment is now measuring “positive”.
Source: Evans & Partners
September is nearly over. Hopefully, it will defy the month’s reputation of being a bad one for stocks, with the S&P 500 having risen to a new record high on 22 September.
The third quarter earnings reporting season occurs in October. We expect it will be a positive one for the market.
Source: Yardeni Research