IMF Revises US Growth Down Again

IMF Revises US Growth Down Again

IMF Revises US Growth Down Again


The International Monetary Fund (IMF) has downgraded its forecast for the US economy this year and warns that political discontent threatens growth globally.

Ttuesday, the IMF cut its estimate for US economic growth in Y 2016 to 1.6% from the 2.2% it predicted in July. The American economy grew 2.6% in Y 2015.

The fund’s dimmed outlook for the US occurs as the US Fed is thought to be preparing to raise interest rates in December.

The US economy weakening since late last year.

The Key element is weak business investment. The fund blames the US  investment lull on cutbacks in the energy industry, a strong USD that is depressing exports and “policy uncertainty” surrounding the November Presidential election.

The IMF says weakness in the US is offset by improving prospects among developing economies. Commodity prices have stabilized after last year’s free fall, which damaged developing countries that export raw materials such as Iron Ore and Copper. The fund left unchanged its forecast for overall global growth this year at 3.1%.

The IMF warns that populist discontent, reflected in Britain’s vote in June to leave the EU and the rise of Donald Trump in the United States could cause countries to retreat from global trade, weakening worldwide growth.

The fund increased its forecast for India to 7.6% growth, fastest among the world’s major economies. And it upgraded the outlook for Russia. The IMF left unchanged its forecast for 6.7% growth in China, the world’s 2nd-biggest economy that is fast approaching #1.

The Fed signaled that it is likely to raise US interest rates at its December meeting, but it has a habit of making predictive statements that a misleading. Investors put the likelihood of a December rate hike at 63%, according to figures from the CME Group.

Tuesday, the US major stock market indexes finished at: DJIA -85.40 at 18168.45, NAS Comp -11.22 at 5289.66, S&P 500-10.71 at 2150.49

Volume: Trade came in above average at 876-M/shares on the NYSE

  • Russell 2000 +9.1% YTD
  • NAS Comp +5.6% YTD
  • S&P 500 +5.2% YTD
  • DJIA +4.3% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bearish (-0.32) Bearish (-0.42) Bearish (-0.42) Neutral (-0.14)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bearish (-0.32) Bearish (-0.42) Bearish (-0.42) Neutral (-0.14)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.17) Neutral (-0.11) Bullish (0.33) Bullish (0.29)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.41) Bearish (-0.29) Bearish (-0.35) Very Bearish (-0.58)

Stay tuned…

The following two tabs change content below.

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.

You must be logged in to post comments :