The data coming from the United States with respect to the third quarter GDP in 2014 go beyond all expectations of financial analysts: the fast growth of GDP to 5% is accompanied by classic year-end rally on Wall Street where the Dow Jones arrived in yesterday’s session above share 18000 posting a new record (the fifth fastest) in reaching 1000 points at the earliest short. A series of positive data that would suggest an entirely positive in 2015, with an exit from the economic crisis now confirmed empirically; but it’s really all that glitters is gold?
The GDP growth
The shot of GDP in the third quarter to 5% was stunned all US financial operators. Already in the process of revision of the data, about a month ago, the US government had shown for the third quarter growth of 3.9%, while, more recently, financial analysts had revised the estimate upward, providing a GDP of 4.3 % for the third quarter. The figure arrived yesterday from overseas, however, beats all expectations the US GDP growth in the third quarter, compared to the second, in which the same rate of growth was recorded at 4.6%, stands at 5%, marking the highest rate of increase in 11 years.
The figure is explained by the growth in consumption, increased by 3.2%, therefore, of a percentage point higher than the initial estimates. Another factor that has contributed to the result of GDP were business investment: the costs in plants have risen 4.8% instead of 1.1% and those in intellectual property an d software 8.8% instead of 6, 4%; equipment investment increased by 11% instead of 10.7%. Although corporate profits have surged by 2.8% from the previous quarter, when it had grown by 1.7%. In total, on an annual basis, GDP growth was 2.7%, a tenth higher than that calculated in the previous quarter: it is, in short, an extremely positive performance that led some government sources, to define 2014 as the year of change.
The year-end rally
Forte’s GDP data, the Dow Jones in yesterday’s session has exceeded 18000 points scoring a new record in the conquest of 1000 points and confirming the bullish trend of the US stock market that has lasted six years. Purchases of US stocks were also accompanied by the purchase of bonds, with the ten year bond that brought its share to yield 2.19%, while, on the currency front, the dollar gained ground on other major currencies.
It was not, however, only the GDP to determine this performance on Wall Street since much is also due to the choices that the Fed has put together in recent days. The decision to leave interest rates unchanged and not to start a restrictive economic policy, with its rising interest rates, provided the markets Sheet confirmations regarding the support that the American banking institutions still want to give the US economic expansion.
The future perspectives
The Fed’s monetary policy, however, can not last forever, by the first half of 2015, probably in April, should get the tight monetary policy that will launch a gradual rise in interest rates.
Beyond the choices that the Fed may still slow down the performance of the US economy, however, are other motivations that lead some traders and financiers to recommend caution in the markets: trends stock market of the next period could be extremely volatile, in fact.
This is understandable considering not only the results achieved yesterday by Dow Jones as the classic product of the euphoria that marks the markets in the last days of the year but, above all, bearing in mind that investors could, in the coming months to field uncertain choices, driven by the need to understand what level is sustainable on the market. What could destabilize most investors is actually the sa me sustainability of US growth, are still too many and too important points that, in the US economy, could prove weaker than expected by the bulk still too large investments in financial products opaque , the redistribution of wealth that has not yet reached levels that can be considered significant, up to the data on unemployment which is eagerly waiting for the imminent publication.
On the international scene, also, if the drop in oil prices should continue in the coming months, the huge investments for the extraction of shale oil may no longer be so affordable for the US.
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