Into the End of the Year

We are 61 days away from the end of the year.

The Nasdaq is up 23.53%, the S&P 500 is up 8.66%, and the bond market is down 2.48%.

This year we’ve experienced banking collapses, another percent of interest rate increases, geopolitical tensions, a ramp up in growth, and a steepening of the yield curve (in a strange way).

Today, however, I want to talk about growth.

Last week real GDP growth came out at 4.90% over the quarter. That’s the largest growth rate in 6 quarters and just about matches the December 2020 print.

That of course sounds like it should be great news for the stock market, after all the companies in the stock market make the goods and services that people consume (GDP is consumption).

However the last few weeks we’ve seen declines in the stock markets and the bond markets.

It makes sense that the bond market would see declines, a ramp up in growth generally correlates with rate increases. But a ramp up in growth and rate increases usually mean the stock market is doing well.

Overall I feel that there is more to be optimistic for today than 20 months ago.