US Data Trumps Expectation
- The US Gross Domestic Product is upwardly revised to 2.1%
- The core PCE inflation weakened to 1.6% YoY in October
- The EU will publish the November Economic Sentiment Indicator today
According to the latest news, the US Gross Domestic Product has been upwardly revised to 2.1% in the third quarter. This indicates that the US economy is going in the right direction. US markets are closed today amid the celebration of Thanksgiving and will be open again Friday. The latest EU numbers failed to impress but the Economic Sentiment Indicator and German preliminary November inflation data will remain at the forefront for investors this Thursday.
The US Gross Domestic Product surpasses expectation
The US released the second estimate of Q3 Gross Domestic Product this Wednesday which surpassed the market’s expectation. The United States has also published Durable Goods orders which were up by 0.6% in October. Durable Goods orders largely surpassed the market’s expectation of -0.8% and the US dollar advanced after this news.
It is also important to mention that the weekly unemployment claims declined to 213K which is better than the 221K expected. Despite this, the core PCE inflation weakened to 1.6% YoY in October. Pending Home Sales also fell by 1.7% in the same month. The Fed is still below achieving the 2% inflation goal on a sustained basis but the baseline outlook for the US economy remains very good.
The EU will publish the November Economic Sentiment Indicator today and Germany will unveil preliminary November inflation. The latest news from the EU was quite discouraging. The economic slowdown continues in the EU and the investors are still waiting for some positive news.
Background noise and Conclusion
The US dollar was up against most major rivals this week. This was backed by encouraging economic news coming from the country. The US stock indices advanced this Wednesday to record highs. The Dow Jones Industrial Average advanced 42.32 points or 0.15% at 28,164.00. The S&P 500 added 13.11 points or 0.42% to 3,153.63 while the Nasdaq was higher by 57.24 points or 0.66% and closed at 8,705.18.
The US financial markets are closed today for Thanksgiving, while they are due to close earlier this Friday. The US economy is in a good place and there is no important reason to be worried. Despite this, Dallas Federal Reserve President Robert Kaplan said “we still have the situation where you’ve got weak global growth, weak manufacturing, and weak business investment”. This adds a note of overall caution for investors.