Latest forecast: 5.4 percent — February 1, 2018 --
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 5.4 percent on February 1, up from 4.2 percent on January 29.
The forecast of real consumer spending growth increased from 3.1 percent to 4.0 percent after this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, while the forecast of real private fixed-investment growth increased from 5.2 percent to 9.2 percent after the ISM report and this morning's construction spending release from the U.S. Census Bureau. The model's estimate of the dynamic factor for January—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.42 to 1.37 after the ISM report.Remember, a lot of folks will be receiving their $1,000-bonuses this month and many more will be seeing wage increases.
On another note: Rush Limbaugh? A national treasure. And apparently a lot of people agree, based on the news that came out today.
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February 4, 2018: Asian demand for commercial aircraft -- 16,000 aircraft.
February 1, 2018:
- 1Q18 GDP now forecast by some to hit 5.4%. Anywhere close to 5.4% will be ... mind-boggling
- US crude oil production hits record high, 10 million bopd
- US oil companies calling back as many as 100,000 workers
- Warren Buffett, Jeff Bezos, and Jamie Dimon enter the health care insurance market
- the two parties in Congress are singing "Kumbaya"
- NOKO and SOKO are singing "Kumbaya"; risk of nuclear confrontation lowered for several more years
- IMF publicly admits that the Trump tax will boost global growth to 3.9%; privately, the forecast is for much greater
- there really is a Trump infrastructure plan (it was "leaked" today); the $1 trillion plan will be centerpiece of his SOTU address
- still no talk of a recession
- still no talk of a bear market (the only thing that ends a bull market is a bull market, they say)
- it looks like Trump is serious about tariffs on China where appropriate (First Solar surged today)
- France is crying "uncle"; wants to link arms with Germany on banking; France-Germany knows they can't compete with the US' lower corporate tax rate; EU will have to become more tax-friendly if it wants to compete with the US; enhances the "synchronized global economy"
- Germany walks away from the Paris accords; others will follow; frees up a lot of money for reinvestment
- the "snowball" effect
- easy money
- regulatory environment: an about-face
- Fed remains cautious
- lower tax rates, literally overnight -- and lowered significantly -- really significantly
- great corporate earnings environment
- JPM surprises
- Fiat Chrysler: NAFTA is dead
- many sectors did not participate in rally during 2017
- consumer confidence at 17-year highs
- cheap, accessible energy
- geopolitical risks dialed way back
- mideast relatively quiet
- Trump sounds more "optimistic" about North Korea
- infrastructure discussion beginning
- WTI flirting with $64 again today
- one week until partial government shut-down
- P/E nowhere near euphoric conditions
- big companies with huge cash holdings: Buffett with more cash than ever
- $1,000 - $2,000 / employee across the spectrum; huge amount of money going back into economy (the government did this in 2008: The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit)