Published Every MondaySince 2007| Volume 766| August 2, 2021
So far YTD these many weeks were up (Bull), down (Bear), or draw (Bull/Bear) … Bulls (Markets UP) = 17… Bears (DOWN) = 11… and Draw = 02
Markets slip for the week – The Dow is down 120 points
The DOW was down -120 points or -0.3%, S&P 500 was down -14 points or -0.3% and the NASDAQ was down -148 points or -1.0% for the week ending July 30th. Oil rose +$1.6 or +2.3% to $73.81 per barrel.
The Delta variant is becoming a cause for concern for investors. It could possibly set the economy back as customers slow down their spending, travel, restaurants, etc.
The U.S. GDP grows by 6.5% annual rate for Q2 2021
The U.S. government reported that the Q2 2021 Gross Domestic Product (GDP) grew by 6.5% annual rate. It is followed by Q1 2021 of 6.4% and Q4, 2020 4.3%. The US GDP is now ~$21T. The second largest GDP in the world is China at ~$14T.
The key driver for this exciting growth is increase in the consumer spending to almost pre-pandemic levels. Consumers are flushed with Covid relief direct payments which are coming back to the economy as spending increases. The reduced infection rate driven by increased vaccinations is helping businesses to open for business. Delta variant infections and severe illness increase among unvaccinated people is starting to increase which may impact the economic growth which we badly need to recover from the 2020 Covid related economic slowdown.
Consumer spending makes up for about 2/3rd of US GDP and it is critical for the US economy, however, Covid impacted the service industry the most where significant jobs were lost and consumer spending was lower than previous year.
The GDP is the key measure of economic growth, such as,GoodsandServices produced by the nation. Below +3% is considered modest growth, and now the US needs to keep beating it for the coming quarters to make up for the 2020 loss.
YTD 2021 Dow is up +14.1%, S&P500 is +17.0% and the NASDAQ is +13.8%
In 2020 Dow was up +7.2%, S&P500 is UP+16.3% and the NASDAQ is UP +43.6%
In 2019 DOW was up +22.3%, S&P500 up +28.9% and NASDAQ up +35.2%
In 2018 the DOW was down -6.7%, S&P500 down -7.0% and NASDAQ down -4.6%.
In 2017 the DOW was up 25.1%, S&P500 up 19.4% and NASDAQ up 28.2%