Q3 Growth Best In A Decade

Q3 Growth Best In A Decade

A strong third-quarter pushed US stock indices into record territories.

Q3 Growth Best In A Decade
Q3 Growth Best In A Decade

Wall Street advanced Tuesday morning on the news that the US economy had its best period of growth in over a decade during the third quarter, reported The Wall Street Journal. Consumer spending and business investment were both strong and gross domestic product grew at a 5% annual rate – the fastest pace since the third quarter of 2013 and up from the second quarter’s 4.6% pace, per Commerce Department figures.

The Federal agency had previously forecast third-quarter GDP growth to be 3.9%, while analysts surveyed by The Wall Street Journal had predicted 4.3% growth. Both numbers were easily outpaced by the actual results and the stock market rose accordingly.

The S&P 500 set a new intraday record at 2,085 after it opened 0.3% higher. The Dow topped 18,000 for the first time ever with a 0.3% advance of its own. The Nasdaq also strengthened at Tuesday’s open with a 0.2% increase.

US market continues its rally

The US stock market rallied from an early-month decline with the strongest 4-day performance in three years, according to Bloomberg, and it appears that recovery will continue today. As of yesterday, the S&P 500 had gained 5.4% in the 4-day stretch following the Federal Reserve’s statement that it would not rush to an interest rate hike.

“The market was roaring yesterday, and going into the end of the year it keeps pushing higher,” Stephen Carl, principal and head equity Williams Capital Group LP in New York, told Bloomberg in a phone interview. “These numbers are adding fuel to the fire. The Fed is part of the fueling of everything, and you have to couple that with the year-end push.”

Monday’s advance for the S&P 500 marked the fifth time this year the index recovered from a loss of 4% or more, but it was the fastest bounce back of those instances. The latest push took 17 days to complete, while other rallies required about a month to erase losses.

Consumer spending, business investment drive GDP gains

The Commerce Department indicated that robust spending from both consumers and businesses were the engine of GDP growth in the third quarter, according to The Wall Street Journal. Consumer spending increased at an annual rate of 3.2%, higher than previous estimates of 2.2%. Goods and services, household spending and health care outlays contributed to the growth.

Business spending was also stronger than initially expected. Fixed nonresidential investment in structures increased at a 4.8% rate after early estimates pegged growth at 1.1%. Intellectual property products spending reached an 8.8% pace – good for a 2.4% increase over expectations.

Optimize market swings with Nadex

For many US investors, the recent upward momentum in the stock market is good news. But market can be fickle and it’s never a bad idea to have a backup plan. Binary options through Nadex can be just that – and more. These short-term, low-collateral options give investors the opportunity to make even bigger gains on their assets, or hedge against losses in a way that won’t prove overly costly.

This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.