Posted on 10/27/2018 6:17:21 PM PDT by SeekAndFind
As of right now, there are two different views of the economy: The stock market view, which for now is bearish, and the GDP view, which is bullish. Which one is right? And which one will the Federal Reserve believe?
Stocks have been in a tailspin since early October. The Wilshire 5000 Total Market Index, which includes more than 3,700 stocks, has fallen by nearly 10% since the start of October a net loss of $3 trillion in market value. It's a big hit for the economy to sustain.
OK, but what about GDP? The nation's output of goods and services rose at a yearly 3.5% rate in the third quarter, beating expectations for 3.3% growth by most Wall Street economists, after rising 4.2% in the second quarter. More than three fourths of the GDP growth came from one sector: personal consumption. That's being driven by a 4.1% jump in personal disposable income, fueled by this year's bonuses, raises and fatter paychecks following the Trump tax cuts.
No Inflation
Even better, the GDP price deflator the broadest measure of inflation rose at an annual rate of just 1.6% in the third quarter. So from an economic standpoint, we have the best of all possible worlds: Fast growth and low inflation.
The message couldn't be more mixed. The market and economy appear to be in a tug of war over the future. The outlook is further clouded by the fact that no one knows how the midterm elections will turn out, or what President Donald Trump will do on tariffs, tax cuts and more deregulation.
Even so, consumer confidence as measured by the IBD/TIPP Economic Optimism Index has been moving up in recent months. So the downturn on Wall Street hasn't yet affected the mood on Main Street.
(Excerpt) Read more at investors.com ...
Soros alone doesn’t have the $ to move the markets in total. Are the big bankers involved? possibly
YES, but FFR is up b/c of fed BS risk *now* of inflation. They are forcing an inverted yield curve.
China.
The Chinese stock market has been pumped up to the max. Last week they stopped propping it up, and their market affects all the other markets of the world.
Plus they quit buying US treasuries at the same time.
No, stocks are not undervalued at all based on typical market conditions. Stocks are undervalued based on LT market adjusted returns at this age point in cycle based on a normal cycle! Which is to say..
Dow is readjusting to a “new” type of economy i.e. a more “normal” form. Exact composition to be determined ;-)
The money that manages it is quite varied.
Good God, you’d expect IBD to at least show some sense. 3 trillion in losses, a big number for the economy to manage?
You’d have to be a total moron to think everyone who sold lost money. people did not lose 3 trillion dollars. Many people were taking profits accumulates over the last few years. A decent portion was short selling.
How can on investment paper, print such a ridiculous article?
People are also taking money out of the DOW for more stable investments.
With interest rates headed up, people are starting to move money around to safer investments.
The Markets will start climbing back up the day after the Midterm election if the Repubs hold onto both Houses
If anyone is confused about the DOW vs GDP as an economic indicator, they know NOTHING about economics.
Looking at the djia for the last few years i am not seeing a 10% stock selloff anywhere anytime... what am i missing?
With the huge endowments such as the Ford Foundation Manhattan Institute Gates Foundation Tom steyer and George Soros I’m quite certain that all of them have program cells in trying to influence the election in the run-up to it.
You’re in my prayers...
Thank you, and vice-versa
Tech stocks tanked the dow. Tech tanked because of Trump kicking cHina’s ass. Bezos lost over 10 billion dollars in a week. Bezos = amazon = china.
Good.
Gdp great, but fed is keeping it lower than it could be. Because...they suck.
When we win the house, the rocket roars again....in my extremely confident opinion.
Yup.
There’s a report today that China is selling selling selling in order to affect the election.
Safer investments... such as??
Does anybody even know how the Dow is calculated? It has something to do with 30 particular stocks if I remember correctly. I’m sure those stocks are SUPPOSED to reflect the spectrum of the economy but I’m skeptical.
I can’t help thinking this is some kind of manipulation by left leaning billionaires.
It is just a matter of time before someone with a brain and determination sees that something is “not right.”
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