FBI’s Announcement on Hillary Clinton Investigation Knocks Stocks off Highs

FBI’s Announcement on Hillary Clinton Investigation Knocks Stocks off Highs

FBI’s Announcement on Hillary Clinton Investigation Knocks Stocks off Highs

$DIA, $SPY, $QQQ, $VXX

The US economy grew at a 2.9% in Q-3, the strongest pace in 2 years, as businesses began restocking their shelves at a faster pace.

The Q-3 US GDP (gross domestic product), the broadest measure of economic health, was 2X the 1.4% pace in Q-2, the Commerce Department reported Friday.

GDP growth slowed beginning late last year.

Exporters were constrained by a rising USD, which made their products more expensive on overseas markets, and businesses cut back on their inventory rebuilding in the face of weaker sales.

With the USD stabilizing, export sales rebounded in the Summer and businesses picked up the pace of inventory building. Solid growth is also expected in Q-4 too.

The latest growth figure was stronger than the 2.5% gainer many analysts had been expecting.

The GDP report was one of the last major economic reports the government will issue before American voters go to the polls on November 8.

Even with the acceleration in Q-3, economists believe growth for the entire year will be an anemic 1.6%, reflecting the weak start to the year.

The economy grew 2.6% in Y 2015. This recovery from the deep Ys 2007-2009 recession has been the weakest in the post-World War II frame, with growth averaging just 2.1% over the past 7 years.

The GDP rate in Q-3 was the US economy’s best showing since it expanded at 5% in Q-3 of Y 2014. In the final 3 months of last year, growth slowed to a 0.9% rate, followed by weak gains of 0.8% ib Q-1 of this year and 1.4% in Q-2.

Economists expect growth to remain solid in Q-4, but at a slightly slower pace of around 2%.

For Q-3, much of the rebound reflected growth in exports, which rose at a 10% rate. That was the fastest pace since late in Y 2013. A narrowing trade deficit added 0.8% to growth.

Another major contributor was stronger inventory building, which added 0.6% to growth after trimming it by 1.2% in Q-2.

US consumer spending, which accounts for nearly 70% of economic activity grew at a solid 2.1% rate but slower than the 4.1-% spending spike in Q-2.

Some economists believe US consumers will continue to support growth in the current Quarter and into Y 2017. We wait to see.

Note:  Hilary Clinton’s chances to win the Oval Office were called into question on Friday afternoon after Congressman Jason Chaffetz tweeted that the FBI is once again looking at the Democratic candidate after new pertinent information came to the forefront. The news introduced uncertainty ahead of the upcoming election, knocking the stock market from its high.

Friday, the US major stock market indexes finished at: DJIA -8.49 at 18161.19, NAS Comp -25.87 at 5190.10, S&P 500 -6.62at 2126.41

Volume: Trade was heavy with about 941-M/shares exchanged on the NYSE

  • Russell 2000 +4.5% YTD
  • DJIA +4.2% YTD
  • S&P 500 +4.0% YTD
  • NAS Comp +3.7% YTD

 

 

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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