This week, I\u2019m going to cut through the noise and highlight\nsome positive economic data and trends happening in the global economy right\nnow. In my opinion, with most news reports overlooking anything remotely\npositive in the economy \u2013 and in some cases with positive data being outright ignored\n\u2013 it could actually be viewed as a bullish sign. When everything is negative, a\ngap starts to form between perception (that the situation is dire and will only\nget worse) and reality (the situation isn\u2019t actually as bad as many believe). <\/p>\n\n\n\n
When stock prices pull back on perception versus reality<\/em>, I think it\u2019s only a matter of time\nbefore reality sets back in and new highs are reached. <\/p>\n\n\n\n __________________________________________________________________<\/p>\n\n\n\n See for Yourself with our Just-released August Stock Market Outlook Report!<\/a><\/strong><\/p>\n\n\n\n Don\u2019t take my word for it, let the data speak for itself\nwith our just-released Stock Market Outlook Report. This 22-page report\ncontains some of our key forecasts to consider such as:<\/p>\n\n\n\n If you\nhave $500,000 or more to invest and want to learn more about these forecasts,\nclick on the link below to get your free report today! <\/p>\n\n\n\n IT’S FREE. Download the Just-Released August 2019 Stock Market Outlook<\/a>1<\/a><\/sup><\/strong><\/p>\n\n\n\n ______________________________________________________________________________<\/p>\n\n\n\n The U.S. and Global\nEconomy are Still Set to Grow in 2019<\/strong><\/p>\n\n\n\n Let\u2019s start with the most important component of the U.S.\neconomy \u2013 the consumer. <\/strong>Consumer\nspending accounts for more than 65% of our country\u2019s economic output.2<\/sup> So, when the U.S. consumer is strong, the U.S. economy tends to\nbe strong too. Just last month, retail sales \u2013 which measures purchases in\nrestaurants, stores, and online \u2013 posted strong month-over-month growth at 0.7%\n(circled in red below), which marks the strongest reading since March. In my\nview, a combination of low unemployment, low interest rates, and rising wages\nare resulting in confident consumers who are opening their checkbooks to shop. <\/p>\n\n\n\n Source: U.S. Commerce Department3<\/sup><\/em><\/strong><\/p>\n\n\n\n Strong retail numbers are good news for\nthe economy. The Atlanta Fed recently adjusted its GDPNow forecasts higher <\/em>because of the retail-sales\nreport, bumping it from 1.9% to 2.2%. Remember, too, that the U.S. economy grew\na solid 2.1% in the second quarter even as business investment slowed and the\ntrade war gained steam. 4<\/sup> Growth in the 2% range is not the most\ninspiring and exciting kind of growth, but it also doesn\u2019t look much like a\nrecession to me. <\/p>\n\n\n\n Globally, the world actually saw a\nsmall increase <\/em>in the rate of\neconomic expansion in July. I realize for many readers that the idea of\nadditional, accelerating growth is hard to fathom given all the bad news and\nthe downside volatility. But readings from the Global Composite Output Index \u2013\nwhich measures activity in services and manufacturing \u2013 showed that output\ngrowth accelerated to a three-month high (51.7) thanks to solid activity in\nservices. Readings above 50 indicate expansionary conditions. <\/p>\n\n\n\n Manufacturing continues to weaken\nvirtually across the board, which is concerning, but it\u2019s being outweighed by\nstrength in services, which tends to matter more in developed economies anyway.\n<\/p>\n\n\n\n Bottom Line for\nInvestors <\/strong><\/p>\n\n\n\n Much like the U.S. economy, on balance the\nglobal economy is expected to grow in the ~3% range in 2019. Most investors may\nnot perceive <\/em>this type of growth to\nbe possible given all the negative headlines and market volatility, but I think\nthe economic reality <\/em>supported by\nhard data currently suggests more strength than many believe. As long as\nvolatility and the negative perceptions of the global economy persist, I\u2019d\nargue that there remains a gap between perception and reality that equity\nprices are likely to fill. It\u2019s just a matter of time, in my view. <\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/Retail_Sales.png\")
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