4.1% GDP growth seems to be a dud

Discussion in 'Economics' started by Gotcha, Jul 27, 2018.

  1. Gotcha

    Gotcha

    I have to say, I'm rather surprised. I would have expected something like this to really provide another boost. When Trump flaps his gums like this, it has always been positive.

    I know he already talked yesterday about how he wants a 4 in front of the number, so this wasn't exactly the best kept secret, but still.

    Could it really be that the markets no longer care about what he says? Are fundamentals finally kicking in?
     
  2. At the very least the VIX seems to have a mind of its own. Trump could announce tomorrow a global nuclear showdown and the fear index wouldn't budge.

    I think anything that comes out of trump's mouth - good or bad, has become white noise to people. desensitisation at a global scale.
     
  3. the market had it figured in already everyone knew it was coming. fundamentals don't really work any longer do they, maybe in my grandpaws day.
     
  4. Gotcha

    Gotcha

    I think fundamentals still prevail, but the market now overshoots way more, holds onto hope much longer, and it takes longer for the truth to come out.
     
    Slartibartfast likes this.
  5. The figures are just not that good either especially when you consider this is fueled by a massive tax break. Pay for itself? maybe a little.

    "Strong 4.1% growth under Trump in Q2 of 2018 would rank as 5th strongest Q of Obama presidency
    —5.1% Q2 2014
    —4.9% Q3 2014
    —4.7% Q4 2011
    —4.5% Q4 2009
    "
     
    Gotcha likes this.
  6. lindq

    lindq

    Buy the rumor, sell the news.

    The oldest rule in the trading book, boys and girls.
     
    ironchef, MarkBrown and Gotcha like this.
  7. in other words the news is whack like crack lol.
     
  8. speedo

    speedo

    [​IMG]
     
    Arnie, Digidave10 and lylec305 like this.
  9. DaveV

    DaveV

    The market, and most economists, think that 2nd Quarter 4.1% increase is an aberration and unsustainable. For example, it is estimated that fully 1/4 of the increase is due to more exports from the USA to countries trying to beat the anticipated tariffs from trade wars. That is not repeatable. Furthermore, the details of the report are not all rosy. The housing market suffering its fourth decline in the past 5 quarters, and business investment, despite the cut in corporate taxes, is the lowest in 2 years.
     
    Sig, Gotcha and Slartibartfast like this.
  10. Sig

    Sig

    The tax cut (lack of) impact I think is significant. It was supposed to pay for itself which would require significant GDP growth. If that doesn't happen, and it isn't happening, it doesn't pay for itself and that is bearish.
     
    #10     Jul 27, 2018