Gross Domestic Product grew at an annual rate of 2% in the third quarter compared to previous expectations of 2.5%. As expected, the market is reacting slightly negative at first glance because of the higher expectations that were built into the number. If you delve a little deeper you can see that there were a few items that are actually quite promising going forward. First, consumer spending is still remarkably strong given the current economic backdrop. Second, business inventories dropped for the first time since the fourth quarter of 2009. These two indicators actually give us hope that fourth quarter GDP may actually have a chance to be revised upwards.
Given the shortened holiday schedule this week, I expect the markets to continue to trade on light volume and also react to major headlines as they unfold.
Eric Marvin
JPT112211-1899
