The Week in Review: July 29, 2024
Brisk Pace for GDP
The U.S. Bureau of Economic Analysis reported that the Gross Domestic Product (GDP), the largest measure of goods and services, expanded at a brisk annualized pace of 2.8% in the second quarter.
That’s up from 1.4% in the first quarter and well ahead of Bloomberg's estimate of 2.0%.
Respectable consumer and business spending offset weakness in housing construction. Stripping out inventories, trade, and government spending, a key measure of underlying demand rose 2.6% for the second straight quarter (Bloomberg).
The second quarter number is ‘backward-looking.’ It reviews economic activity from April through June, and we are set to enter August.
Still, the upbeat pace is encouraging and bodes well for the general economy and the Federal Reserve, which hopes to guide economic activity toward a soft landing.
The Fed is once again hinting at reducing interest rates since it is aware that maintaining high rates over an extended period could tip the economy into a recession.
Such a scenario would likely bring the rate of inflation down even faster, but the price would be high—millions of job losses.
Market Summary
Two for the Road
The first 15 days of July of this year marked the best two-week stretch for the S&P 500 since 1928. -MarketWatch, July 18, 2024
Growth stocks' outperformance versus Value is now at its highest level since 2000. What happened in the seven years following July 2000? Reversion to the mean. Growth stocks declined 27%, while Value stocks gained 84%. - Charlie Bilello, June 18, 2024
Please do not hesitate to contact me with any questions or concerns. I hope you have a wonderful week!
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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