Decline in Economic Growth and Rising Stocks
A decrease in GDP growth rate along with an increase in corporate profits is considered beneficial for the stock market.
Content:
Growth
The desired outcomes for the stock market lie in a slowdown in GDP growth rate and a rise in corporate profit growth.
While a slowdown in GDP growth and the labor market indicates a decline,
corporate profits continue to grow (a 3% increase in corporate profits over the past twelve months compared to the same period last year).
Gold
Decline in Gold Prices:
Global gold prices fell in current trading on Monday as traders await more U.S. economic data this week.
This came after recent data showed inflation stabilized and expectations increased for a Federal Reserve interest rate cut later this year.
U.S. employment data will have a short-term impact on gold prices,
and if it shows some slowdown in the labor market,
it will be positive for gold prices.
Gold received some support from personal consumption expenditures (PCE) reports,
which were slightly below expectations, reinforcing the idea that the Federal Reserve could cut interest rates this year.
OPEC
OPEC Plus Meeting on Production Cuts:
After its meeting on Sunday, the OPEC Plus coalition announced in a statement that member countries agreed to extend crude oil production cuts throughout 2025. This decision aims to support price levels amid numerous stability challenges. The statement confirmed that OPEC Plus countries agreed to extend crude oil production cuts from January 1, 2025, to December 31, 2025. The statement also mentioned approval for the United Arab Emirates to increase its production by 300,000 barrels per day next year. This increase in UAE production will be implemented gradually in phases from January 2025 to the end of September 2025.
Decline in Economic Growth and Rising Stocks