I’ve got growth on my mind
This Friday we will get the second reading of US GDP for the last quarter of 2015. The U.S. economy probably ended 2015 much weaker than analysts anticipated, with the current estimates showing the slowest growth in the past two years.
Below are a couple of signs that may be hinting us towards a larger economic slowdown, (on top of China) and despite the positive numbers from the jobs report this past month:
- Earnings. U.S. corporate profits were lackluster this past earnings season. With nearly 9 out of 10 S&P 500 companies having reported their fourth-quarter 2015 results, earnings are down 3.6 percent for the quarter, according to FactSet. This is the largest drop since the year of doom 2009. Even Walmart’s CEO said last week during their earnings announcement “we have faced specific challenges in our largest e-commerce markets outside the U.S.” which shows emerging markets sluggish performance hitting home hard.
- Fed is worried. In the last minutes of the FOMC Jan. 26–27 meeting, the Fed mention risks to the downside include a stronger dollar, stock market turmoil and higher corporate borrowing costs could slow economic growth this year. “Uncertainty” is the name of the game again. It’s looking less likely that they will pull the trigger (hah!) again on rates anytime soon.
- Oil situation may be worse than anticipated. News this week out ruled any hopes of a cut to oil production by Saudi Arabia and Russia, weakening the hopes of any rebound in oil prices anytime soon. Lower oil will only put more pressure on growth, inflation and stock prices in the near term.
Some are starting to call 2016 the Great Recession Scare Of 2016, but fear not dear Trigger users, we will prepare you with triggers that will keep you on top of your game if we do enter such a rocky road.
Below is our beloved trigger card. This trigger will alert you if Friday’s US GDP number comes in below 0.4% within seconds of the number being released. The trigger also gives me a progress bar indication on the right of a countdown to the next GDP event. The dark blue bar will fill up as it’s getting closer to being triggered. Anyone can copy this trigger from me and watch the event in real time! If the number comes in above our target, we will also alert you — but hey a higher number works better for all of us :)
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