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Monthly Archives: July 2014

Midsummer Madness

Eight times per year, the outcome of the Federal Reserve’s (Fed) Federal Open Market Committee (FOMC) meeting becomes the focal point for market participants. Four times each year, the Bureau of Economic Analysis’

(BEA) first estimate of gross domestic product (GDP), the first look at the health of the economy in the prior quarter, dominates the headlines. Similarly, at the start of each month, the Report on Business from the

Institute for Supply Management (ISM) and the monthly labor market report from the U.S. Department of Labor are the centerpieces of any trading week. This week (July 28 – August 1, 2014), all four of these key events are

on the docket. How rare is this? In the 760 weeks between…

Midsummer Madness

Gauging Global Growth in 2014 & 2015

The outlook for global growth is important to investors, since it defines the ultimate pace of activity that creates value for countries, companies, and consumers. This week, as investors begin to digest the S&P 500 earningsreports for the second quarter of 2014, we provide an update on how estimates for economic growth for 2014 and 2015 in the United States and across the globe have evolved over the past few years. Last week, Christine Lagarde, Managing Director of The International Monetary Fund (IMF), signaled that the IMF would cut its global growth forecasts for both 2014 and 2015, when it releases its mid-year forecast update later this month. Although the release garnered plenty of headlines in the media, the majority of financial market participants took little notice of the report. Why? Because consensus…

Gauging Global Growth in 2014 & 2015

 

Disconnect?

In the wake of the release of the monthly jobs report, many financial market participants are debating the seeming disconnect between the weak first quarter of economic growth and the recent run of strong data for April, May,and especially June 2014.  The rapid improvement in the labor market, and in other economic data reported over the past several months, is at odds with the 2.9% decline in gross domestic product (GDP) in the first quarter of 2014. Which is correct? We continue to expect that economic growth may rebound to a 3% pace for all of 2014.* In fact, the return to a more normal weather pattern nationwide has already led to a sharp snapback in economic activity.

Disconnect?