Amid Darkening News, Positive Economic Signs
Published Friday, November 18, 2022 at: 8:10 PM EST
The bear market entered its sixth month and conflicting signals of strength and weakness in the economy stood out this past week.
Friday morning’s release of the U.S. Index of Leading Economic Indicators marked this key economic indicator’s eighth straight monthly decline, and Thursday’s housing starts release marked its ninth consecutive monthly decline. These are ominous signs.
However, retail sales, excluding gasoline because its price is so volatile it distorts the picture, shot up +7.9% in the 12 months through the end of October. In October alone, retail sales surged 1.3%, a clear sign of strength. Additional strength was signaled in Thursday’s GDPNow estimate for real GDP growth in the fourth quarter of 2022 of +4.2% -- much higher than the consensus of leading economists.
The +4.2% seasonally adjusted annual growth rate estimate is a running estimate of what’s happening now in the economy based on an algorithm devised by the Federal Reserve Bank of Atlanta. The model is designed to grow more accurate as more data is released each quarter and its estimates have been wildly inaccurate many times in recent years. However, in recent months, the GDPNow growth forecast has been more accurate than the forecasts from leading economists.
The S&P 500 stock index closed Friday at 3,965.34 gaining +0.48% from Thursday, and down -0.69% from a week ago. The index is up +77.22% from the March 23, 2020 bear market low and -17.32% lower than its January 3rd all-time high.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
- Ending Inflation Will Take Months
- Economists Predict Lackluster 4Q22 Growth; Fed Algorithm Predicts 4.3%
- Amid Darkening News, Positive Economic Signs
- Stocks Soared This Past Week But Economic Pain Is Still Ahead
- Factors Blurring The Likelihood Of A Recession
- Weekly Investor Update
- Stocks Rose 4.7% This Past Week, Amid A Bear Market
- 105 Years Ago In Investing: Conditions Were Much The Same As Today
- A Timely Reminder Of Why You Take Stock Risk
- Good And Bad Financial News: Weekly Investment Update
- A Financial And Tax Planning Strategy For This Week's Stock Market Plunge
- Having Trouble Tuning Out The Bad Financial Economic News?
- A Key Signal Of Strength At A Pivotal Moment In Economic History
- Despite Strong Jobs Report, Stocks Declined Last Week
- The Fed Risks A Recession To End Inflation, As Expected
- Stocks Snap Four-Week Win Streak
- Stocks Have Soared Lately, But What Should You Expect Near And Long-Term?
- Investing In An Economy Beset By Multiple Anomalies
- Despite Bad Economic News, Stocks Rose 4% In The Week Ended July 29, 2022
- Amid Bad Data Releases, Leading Economists Predict No Recession
- Good News: Real Retail Sales Dropped Fractionally In The Past Year
- Financial Economic News Analysis
- The Good News Is All This Bad News
- Four Signs A Recession Could Be Short And Shallow