gdp now estimate
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Started by bear - Dec. 16, 2020, 12:11 p.m.

https://www.frbatlanta.org/cqer/research/gdpnow


an interesting divergence here.  the fed estimate is going up,

but the blue chip forecast is flat, and going nowhere. 

which one is more accurate, and why? 

Comments
By metmike - Dec. 16, 2020, 1:39 p.m.
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Very interesting indeed!

Is this already dialed into stocks?

So if GDP growth was only half the prediction, failing  to meet expectations........stocks would go down?

By wglassfo - Dec. 16, 2020, 5:36 p.m.
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It seems to me that GDP has little to no influence on stk price

What really matters is liquidity injections

Many people have written about the bottom 90 % receiving very little relief from gov't stimulus

Many have agreed the 1200 dollar cheque plus enhanced unemployment benefits did help and more is needed

But many problems exist such as evictions, even with stimulus, the rent is too far in arrears, food lines never before seen in such quantity or numbers, land lord facing mortgage default, the list goes on

One has to agree housing did very well in some places and stks did very well. Some even managed to pay down car loans, credit card

CEO's got a larger increase in wages vs the average salary over the past 10 yrs.

In other words you had winners and losers. Nobody knows if that 90/10 % split is accurate but it is close

So where in all this did GDP affect stk prices

IMO liquidity and momentum affects stk prices not GDP or stks would be down at least on those who do not have P/E ratio sufficient to warrant the stk price. Is Tesla worth ?? of is this momentum buying

The Fed is convinced QE and/or stimulus injections will keep the economy afloat until we cure this covid problem

No where do I find a sustained correlation between GDP and stk prices, 

My final question and most important

Where will the buyers come from other than Fed/gov't liquidity injections, when most are all in, or put another way [most are on the same side of the boat]

So: What ever the stk market does, I don't think GDP has a nickels worth of affect