Markets are flat — seemingly exhausted after so much volatile back-and-forth — in Wednesday’s early trading session. We’re on the back half of the week, with the stock exchanges closed in this country Friday for Christmas (Eve). Markets are actually now creeping a little lower into the red, flushing out yesterday’s gains made after Monday’s big drop.
Most focus currently is on 2022 — the Fed tightening, the Omicron variant — with plenty of questions regarding how strong the economy will be over the next few months. And when we talk about the Omicron strain of Covid-19 coronavirus, the U.S. is only part of the puzzle: how will countries, particularly big U.S. trading partners, deal with the rapid spread of this latest mutation? What will it do to supply chains in 2022? Will the Fed need to make further adjustments to monetary policy?
That’s a lot of questions to ask coming into the end of 2021. Yet at this stage we’re still looking at double-digit percentage gains on all major stock indexes, even with the Great Reopening many of us had expected running into many speed-bumps along the way. So while we’ve shown resiliency in the face of market and economic challenges, we’re not out of the woods of our current predicaments quite yet.
Looking backwards a moment, the final revision to Q3 Gross Domestic Product (GDP) came in surprisingly upwardly revised 20 basis points to +2.3% last quarter. Personal consumption gained 30 basis points to a solid +2.0% in the quarter. For the Q3 GDP Price Index, we see a headline number of +6.0% — in-line with expectations, and slightly off the June read of +6.1%, which just so happened to be the biggest gain in quarterly GDP pricing in 40 years.
Quarter over quarter, core Personal Consumption for Q3 came in at +4.6%, moderating a bit from the +6.1% reported last time around — which itself was a 38-year-high. So all things considered, we’re looking pretty strong on the consumer/pricing tack. And this includes the challenges we faces with the Delta variant of Covid sweeping through the global economy and, what we just saw reported yesterday, the lowest U.S. population growth last year in our country’s history.
Q3 GDP at +2.3% represents by far the lowest quarter of 2021, following +6.3% in Q1 and +6.7% in Q2, and with current projections for Q4 somewhere in the +6.5% range. And, as we saw during the Q3 earnings season recently concluded, companies generally experienced success in combatting these myriad headwinds. Looking forward to Q4 results, Omicron probably came too late to have a major affect on the numbers, so we remain positive that we’ll have returned to strong growth.
After today’s open, we’ll get a look at December’s Consumer Confidence Index. Expectations are for a slight rise to 110.0. Also Existing Home Sales results come out for November, with an increase to 6.5 million homes sold from 6.34 million reported in October. In short, wide economic strength is expected to continue. And even if it doesn’t, and these actuals come in below projections, we don’t expect either metric to have a disruptive affect on today’s trading.
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Economic Data Deluge
Markets are flat — seemingly exhausted after so much volatile back-and-forth — in Wednesday’s early trading session. We’re on the back half of the week, with the stock exchanges closed in this country Friday for Christmas (Eve). Markets are actually now creeping a little lower into the red, flushing out yesterday’s gains made after Monday’s big drop.
Most focus currently is on 2022 — the Fed tightening, the Omicron variant — with plenty of questions regarding how strong the economy will be over the next few months. And when we talk about the Omicron strain of Covid-19 coronavirus, the U.S. is only part of the puzzle: how will countries, particularly big U.S. trading partners, deal with the rapid spread of this latest mutation? What will it do to supply chains in 2022? Will the Fed need to make further adjustments to monetary policy?
That’s a lot of questions to ask coming into the end of 2021. Yet at this stage we’re still looking at double-digit percentage gains on all major stock indexes, even with the Great Reopening many of us had expected running into many speed-bumps along the way. So while we’ve shown resiliency in the face of market and economic challenges, we’re not out of the woods of our current predicaments quite yet.
Looking backwards a moment, the final revision to Q3 Gross Domestic Product (GDP) came in surprisingly upwardly revised 20 basis points to +2.3% last quarter. Personal consumption gained 30 basis points to a solid +2.0% in the quarter. For the Q3 GDP Price Index, we see a headline number of +6.0% — in-line with expectations, and slightly off the June read of +6.1%, which just so happened to be the biggest gain in quarterly GDP pricing in 40 years.
Quarter over quarter, core Personal Consumption for Q3 came in at +4.6%, moderating a bit from the +6.1% reported last time around — which itself was a 38-year-high. So all things considered, we’re looking pretty strong on the consumer/pricing tack. And this includes the challenges we faces with the Delta variant of Covid sweeping through the global economy and, what we just saw reported yesterday, the lowest U.S. population growth last year in our country’s history.
Q3 GDP at +2.3% represents by far the lowest quarter of 2021, following +6.3% in Q1 and +6.7% in Q2, and with current projections for Q4 somewhere in the +6.5% range. And, as we saw during the Q3 earnings season recently concluded, companies generally experienced success in combatting these myriad headwinds. Looking forward to Q4 results, Omicron probably came too late to have a major affect on the numbers, so we remain positive that we’ll have returned to strong growth.
After today’s open, we’ll get a look at December’s Consumer Confidence Index. Expectations are for a slight rise to 110.0. Also Existing Home Sales results come out for November, with an increase to 6.5 million homes sold from 6.34 million reported in October. In short, wide economic strength is expected to continue. And even if it doesn’t, and these actuals come in below projections, we don’t expect either metric to have a disruptive affect on today’s trading.