Q3 GDP Sees Another Resurgence & Energy Looking Sweet Again
On Friday, the government released a first look at Q3 GDP which I had been looking in the 3% range before the hurricanes hit. It wouldn’t have surprised me if that number was a quarter to half point lower. However, even with the hurricanes, the resilient U.S. economy still grew by 3%. All year, I have written about the economy accelerating to the upside in Q2 and Q3 with the election as the catalyst. Way too many people underestimated the powerful impact of the GOP sweeping the board last November.
Of course, the president wants to and will take the credit for the resurgent growth; they all do But I firmly believe that almost anyone in the GOP would have seen the same or similar results. It’s the sweep that mattered. Anyway, not only is the U.S. economy accelerating higher but so is the rest of the world. Japan and Europe are showing growth that far exceeds analysts expectations and the best numbers in years.
This all translates into booming global stock markets, but that’s nothing new. Remember, stocks move long before the data do, roughly 6 to 9 months. Today, stocks are a little jittery after Kevin Brady offered that a “phase in” of the corporate tax cut is on the table. That’s the same Kevin Brady who once thought the border tax was an absolute certainty. We’ll see. I still think comprehensive tax reform gets passed by mid February, but I am losing a little faith that it will be as good as I once thought.
In the markets today I am looking at a small pullback in stocks, but the energy sector looks to be ready for another leg higher. That could be 10%+ into year-end if the stars line up properly.
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