The numbers are the numbers and the numbers on the GDP for the fourth quarter are not good, but the drop in GDP for the fourth quarter is not as bad as it might seem. True, according to the US government, the US economy contracted slightly; however, consider that the fourth quarter contained Hurricane Sandy and the breathless media peddling fear of the fiscal cliff that created uncertainty for businesses. On top of those powerful negatives, long-projected cuts in defense spending took place in the fourth quarter. The GDP data is a glitch in an otherwise long-term, slow growth pace of the US economy.
The market seems to understand the GDP data is an outlier. It is behaving as it has behaved for some weeks now – gentle undulations as it approaches its historic highs. Perhaps the market looked deeper into the data as I did and found the following.
- Consumer spending, which accounts for more than two-thirds of economic activity, rose at a 2.2 percent rate, accelerating from the prior quarter’s 1.6 percent growth pace.
- Business investment rebounded after its first drop in 1-1/2 years in the prior quarter.
- Residential construction grew at a 15.3 percent rate after notching a 13.5 percent growth pace in the third quarter. Homebuilding added to growth last year for the first time since 2005.
- Income available to households after taxes and inflation increased substantially in the fourth quarter.
The GDP problem last quarter points to the fragility of the US economy and to structural issues caused by a transformation from an economy reliant on archaic manufacturing to an economy utilizing current technology. This process of adaption takes time. In the meantime, keep your eye on 2013 …
- Chrysler Group LLC predicted that U.S. industry auto sales would reach 15.5 million this year, including medium and heavy trucks, up 4.7 percent from last year’s better-than-expected performance.
Yes, 2013 looks to be another good year for the market, but to take advantage of it, one needs to do his or her work and one has to have tools that help create an edge. The reader below asks an important question all should consider when looking for the software tools one needs.
- Have you ever heard of trading software called VantagePoint by a company called Market Technologies? Is this legitimate trading software or just another market scam?
Yes, I have heard of both. In fact, I have been a user of VantagePoint since early 2007. It is legitimate and not a scam, and it will work for you, if you do the work any trader or investor needs to do to be successful.
VantagePoint is quality software that does provide an edge, but it is not a silver bullet. One has to know how to trade and one has to understand the market. If you do, however, it is highly probable the software will work for you.
Trade in the day; Invest in your life …
