Believe it! GDP is UP 3.5%. How does that break down though? Of the 14.4 trillion dollar economy
government spending is a FLAT 1.7 % of the growth we are showing for quarter 3. WOW. Automobile production as a result of the Cash for clunkers program and other indirect government stimulus were also a part of that gain. So...with everything stripped out: we show about 1/2 percent real growth. 1/2 percent growth IS BETTER than negative growth so good news...however: any long-term growth or growth for quarter 4 will not be as strong according to analysts. Stay tuned...most agree the recession is over and the question is how will things continue to grow without government stimulus. 2.3% of the GDP was consumer spending. (Again: think cash for clunkers, housing credit's broader consumer spending ripple, etc.)
FNMA 4.5% bond lost 38 bps this session and rates for mortgages come up with that. Part of that loss today was because investors were excited about the GDP growth announcement along with the really poor reception of the 31 billion dollars of bonds auctioned off.
Black Friday Tomorrow? YES...and no. Sears among other retailers are putting some super sales out starting tomorrow to try to pick up some early holiday money.
VIX: Volatility Index or fear factor for investors is creeping up again.
DOW was up 200 points and many feel that was a knee jerk reaction to good news. (GDP was Up and unemployment filings were down slightly among other "good" things reported today.) This is sometimes called a "relief rally". We will have to see how things go tomorrow. Great corporate earnings reported for Q3 also contributed to the rally.
Cheers,
Chad
