Today we expect the preliminary report on the GDP of the United States for the second quarter of 2019. The reading is forecasted at 1.8%, which is the lowest value in a couple of years and nearly half lower than Q1, which came in at 3.1%.
Economic growth in the United States right now is being constricted by the ongoing trade war between the US and China. Because America imposed steep tariffs on Chinese products - and because US manufacturers continue to import quite a bit of parts and materials from China, the tariff money is coming out of American pockets. To cut costs, US employers have had to lay people off and slow down production. This has also corresponded to a recent increase in unemployment rates, the first one in years.
Based on the deterioration of the economic climate in the United States, investors expect an interest rate cut by the Federal Reserve to be announced next week.
On the other hand, the companies in the S&P 500 have demonstrated impressive growth, even if not all earnings data has been published yet. Google and Intel both showed significant gains, while today we await news from Twitter and McDonald’s, among others.
