U.S. GDP, corporate earnings and Japan

In this week’s video update:

  • Q2 U.S. Gross Domestic Product (GDP) comes in below expectations at 1.2%.
  • U.S. Federal Reserve (Fed) hold interest rates steady this week. Is a September rate hike on the table?
  • Earnings season in full swing, generally coming in above expectations so far.
  • Did events in Japan this week offer global markets positive signals for Japan’s economic outlook?

On this week’s update Managing Director, Investment Practice Adam Goff discusses the paltry U.S. second-quarter GDP, which came in at 1.2% and below expectations of 2.6%. He notes most of the U.S. GDP rebound in the second quarter was due to consumer spending. Goff also mentions the Fed’s decision to hold interest rates steady at their meeting this week, which did not surprise the markets. Goff still believes there will be one rate hike this year, likely in December.

Moving to earnings: With some high-profile announcements coming out this week beating expectations, Goff expects gradual improvement to continue throughout the year.

Lastly Goff shifts to Japan, where Prime Minister Shinzo Abe announced a record economic stimulus package this week and the Bank of Japan surprised the markets by only offering up a mild dose of stimulus. While the news might potentially signal how it will help Japan’s economy down the road, Goff notes that nothing fundamentally changed Russell Investments’ view on the trajectory of the Japanese economy or market at this point. Manager, Global Communications Alexandra Davis hosts.

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