One indicator has Wall St. abuzz with expectations for near zero economic growth in Q1/19.  The widely followed Atlanta Fed GDP Now Forecast for annualized GDP growth in Q1 calls for just 0.38% growth – a near recession level.  Remember, a recession is defined as two consecutive quarters of negative annualized growth.  We believe the fear of a near recession growth slowdown may be overstated given that in four the past five years, the Atlanta Fed indicator has shown a similar drop in Q1 (Figure 1), only to end up with better growth moving forward. 

In other words if the market does suffer a bout of profit taking, we believe it would temporary given that growth expectations may have become overly pessimistic based on an indicator with a seasonal skew.

Figure 1 – Atlanta Fed GDP Now Forecast is too seasonal!

Sign up to access the rest of this content!

You'll need to sign up for an account to access the rest of this content.

Use the discount code 1MONTHFREE to get your first month free!




Share this: