Weekly bottom line - finance
Here your weekly bottom line from last week. I hope you all have a great week!!!
- Economic data this week were supportive of the narrative of ongoing improvement in activity. Despite a slight downward revision to estimated real GDP growth in the second quarter (1.1% from 1.2%), the details showed an upward revision to consumer spending and business investment and a slightly larger drawdown in inventories.
- Janet Yellen’s speech in Jackson Hole noted the improvement, saying at “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”
- With considerable uncertainty around the eventual neutral interest rate, the pace of future rate hikes will be glacial and contingent on ongoing calm in global financial markets.
- As the unofficial end of summer draws near, analysts will have more and more Canadian economic data from the second half of the year to dissect. That data is expected to confirm that the Canadian economy bounces back from an abysmal second quarter.
- Corporate profits fell for the fourth consecutive quarter in the second quarter, foreshadowing next week’s real GDP report. TD expects the Canadian economy shrunk 1.5%. June GDP is expected to be a silver lining, with a 0.4% monthly increase setting the third quarter up for a rebound.