Dow Falters While Trump’s ‘Greatest Economy Ever’ Faces a Brutal Reality, Crypto Coins News

Dow Falters While Trump’s ‘Greatest Economy Ever’ Faces a Brutal Reality, Crypto Coins News

  • The Dow, S&P 500, and Nasdaq all crept to a dull session ahead of the Federal Reserve’s interest rate decision and policy statement release.
  • Third-quarter GDP beat estimates, but growth still slowed to 1.9%.
  • The US economy will face severe pressure if consumer data begins to falter.

The Dow traded with little conviction on Wednesday following the release of a new batch of data which confirmed – contrary to President Trump’s frequent claims – that the US economy is not the greatest in history.

In fact, the country’s longest-ever economic expansion is grinding toward slower and slower growth, sparking warnings that a contraction waits on the horizon.

Dow, S&P 500, and Nasdaq All Creep Sideways

Wall Street’s major indices remained little changed during the morning session, continuing the trend from ahesitant futures session.

The Dow Jones Industrial Average fluctuated around its previous close, falling 1. 74 points or 0. (% to) , 069. 68.

The Dow traded near its previous-day close on Wednesday. | Source:Yahoo Finance

The S&P 500 edged 0. 29 points or 0. (% higher to 3, 037. 13.

The Nasdaq also crawled toward a slight gain, adding 3. 75 points or 0. 05% to trade at 8, 280. 61

Gold slogged to a 0. 17% increase, which raised the price of the yellow metal to $ 1, 493. 20, while oil dipped 0. 18% to $ 55. 44.

US Economic Growth Continues to Slow

The stock market is on edge ahead ofthe Federal Reserve’s interest rate decisionthis afternoon, but even more important than that – investors and economists overwhelmingly expect a rate cut – is what the central bank signals about future policy decisions.

Chair Jerome Powell hassaid the Fed desires to “sustain this expansion,”but what measures the bank believes are sufficient to accomplish that policy goal all depends on the FOMC’s reading of the US economy, which continues to lag far behind President Trump’s growth target.

The White House budgetpredicts an annual growth rate of 3.2%, and judging by Trump’s Twitter feed, you’d think GDP had smashed even those bullish expectations. He fired off three tweets to that effect in less than 24 hours leading up to today’s GDP report, the most recent of which merely read : “The Greatest Economy in American History!”

However, Wednesday’s GDP dump doesnotseem to support Trump’s boast, at least on the surface.

According to the Commerce Department,US GDP grew at a rate of 1.9% in the third quarter, a minor dip from the second quarter’s 2% print.

Third-quarter GDP revealed that US economic growth is slowing, which could put pressure on the Dow – unless it spurs the Fed to adopt a more dovish approach to policy. | Source:Commerce Department

The result beat economist predictions of 1.6%, but itdashes any stray vestigates of optimismthat Trump will achieve his 3.2% annual growth target.

“Oh, we won’t get a 3- plus% growth rate for the year, ”Diane Swonk, chief economist at Grant Thornton, told NPR. “That’s not going to happen.”

The Consumer Is the Economy’s Last Line of Defense

One reason third-quarter GDP beat economist estimates was that consumer spending jumped by 2.9%, suggesting that the slowdown has not yet stifled this last defense against a recession. Analysts say that strong consumer data hasbecome more vital than everfor the economy’s outlook.

“If consumer spending misses a beat in the fourth quarter , there is little other support for the economy to fall back on, ”said Scott Anderson, chief economist at Bank of the West in San Francisco.

Unfortunately, there are indications that consumers are losing confidence in the economy’s trajectory and their own employment prospects. On Oct. 29, theCB Consumer Confidence index printed a 125 .9, a slight decline from the previous month, and a few points below the consensus forecast.

Aslew of data releases on Thursday and Fridaywill provide more insight into the health of the US consumer, with crucial reports on personal income and personal spending slated to drop tomorrow at 8: 30 ET ET.

Noting that business investment declined 3% for the quarter, stock market bear David Rosenbergwarned that consumer data would be a lagging indicatorof a contraction. Now that the business sector is in a “recession,” he said, consumer spending would inevitably follow.

Click here for a live Dow Jones Industrial Average chart.

This article was edited by Sam Bourgi.

Brave Browser
Read More

What do you think?

Leave a Reply

Your email address will not be published.

GIPHY App Key not set. Please check settings

Amber Rudd: Former Home Secretary standing down – BBC News, BBC News

Amber Rudd: Former Home Secretary standing down – BBC News, BBC News

HBO Made the Right Call Icing Naomi Watts' Game of Thrones Prequel, Crypto Coins News

HBO Made the Right Call Icing Naomi Watts' Game of Thrones Prequel, Crypto Coins News