The Trump Effect: Atlanta Fed Keeps GDP Forecast at 4.4%
$DIA, $SPY, $QQQ, $RUTX, $VXX
Wednesday, the S&P 500 finished with a gainer of 0.1%, driven by financial shares, which rallied on another rise in interest rates.
The blue-chip DJIA outperformed, adding 0.6%, the NAS Comp lagged, closing lower by 0.1%, and the small-cap Russell 2000 finished – 0.5% on the day.
The US economy is expanding at a 4.4% annualized rate Q-3, the Atlanta Federal Reserve’s GDPNow forecast model showed Wednesday after home-building increased more than expected in August.
The boost in housing starts was seen as a positive sign for the housing market which has under-performed the broader economy amid rising interest rates for home loans.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in Q-3 of Y 2018 is unchanged from 14 September, the Atlanta Fed said.
After Wednesday morning’s new residential construction release from the Census Bureau, the nowcast of Q-3 real residential investment growth inched up from -0.7 to -0.2%.
The next GDPNow update is Thursday, 27 September.
Housing starts rose 9.2% to a seasonally adjusted annual rate of 1.282-M units in August, the Commerce Department said. Analysts polled expected an annual rate of 1.235-M units.
Jeffrey Gundlach, CEO of DoubleLine Capital, Wednesday said bond prices across the US Treasury yield curve could fall if the 30-yr T-Bond yield closes above 3.25% 2X in a row.
The yield on the 10-year T-Note and 30-year T-Bond both hit 4-month highs early Wednesday.
Mr. Gundlach told Reuters he is still forecasting 6% on the 10-yr yield by the next Presidential election in Y 2020 or in 2021..
He added: “My 6% by 2021 call is perfectly on track. No reason at all to change it. A move soon to higher yields would be signaled by the 30-year closing 2 days in a row over 3.25%.”
Wednesday, the US major stock market indexes finished at: DJIA +158.80 at 26405.76, NAS Comp -6.07 at 7950.04, S&P 500 +3.64 at 2907.95
Volume: Trade on the NYSE came in at 827-M/shares exchanged
- NAS Comp +15.2% YTD
- Russell 2000 +10.9% YTD
- S&P 500 +8.8% YTD
- DJIA +6.8% YTD
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