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GDP up 4.1%; why is Dow dropping 30 points?

Posted on 7/27/18 at 11:09 am
Posted by matthew25
Member since Jun 2012
9425 posts
Posted on 7/27/18 at 11:09 am
Best GDP number in 45 months.

The Dow should be up >250 points

Posted by LSURussian
Member since Feb 2005
131454 posts
Posted on 7/27/18 at 11:15 am to
quote:

GDP up 4.1%; why is Dow dropping 30 points?
Best GDP number in 45 months.

The Dow should be up >250 points

The nice bump in GDP has been predicted and expected for weeks. The stock market already baked in the growth number long before today.

"Buy on the rumor. Sell on the news."
Posted by GenesChin
The Promise Land
Member since Feb 2012
37749 posts
Posted on 7/27/18 at 11:40 am to
quote:

The stock market already baked in the growth number long before today.


Also, the DOW isn't a perfect 1:1 correlation with market performance so that throws some volatility from calculation + equity inclusion as well
Posted by Skeezer
Member since Apr 2017
2296 posts
Posted on 7/27/18 at 11:42 am to
Have you seen our debt to income ratio?

It ain’t good
Posted by Bestbank Tiger
Premium Member
Member since Jan 2005
75946 posts
Posted on 7/27/18 at 11:47 am to
quote:

The nice bump in GDP has been predicted and expected for weeks. The stock market already baked in the growth number long before today.


This. The GDP numbers are just the official announcement of what people already knew.

Plus this likely means an interest rate hike is coming.
Posted by GenesChin
The Promise Land
Member since Feb 2012
37749 posts
Posted on 7/27/18 at 12:07 pm to
quote:

Have you seen our debt to income ratio?

It ain’t good



Our interest servicing cost as a % of GDP is actually very good

LINK
Posted by slackster
Houston
Member since Mar 2009
90117 posts
Posted on 7/27/18 at 3:12 pm to
quote:

Best GDP number in 45 months.


Did it surprise you? Did it surprise anyone?
Posted by Stuckinthe90s
Dallas, TX
Member since Apr 2013
2683 posts
Posted on 7/27/18 at 4:13 pm to
Our interest servicing cost as a % of GDP is actually very good

Yeah, but isn't that because of the Quant Easing keeping rates artificially low? What happens in 5 years when rates are back up and we are still spending the way we are? I am not familiar with the metric at all, so please forgive my ignorance.
Posted by NC_Tigah
Make Orwell Fiction Again
Member since Sep 2003
131773 posts
Posted on 7/27/18 at 7:36 pm to
quote:

matthew25
After you got the identical responses on this board as you did on the PoliBoard, did you learn something?
Posted by jcole4lsu
The Kwisatz Haderach
Member since Nov 2007
31006 posts
Posted on 7/27/18 at 8:14 pm to
isnt the actual answer shitty revenue outlook from social media companies due to pretending to spy less on people?
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/27/18 at 10:55 pm to
The 4.1% was dead in line with Wall Street consensus. The market had already priced this in, as evidenced by the rally leading into it.
Posted by geauxpurple
New Orleans
Member since Jul 2014
14992 posts
Posted on 7/27/18 at 11:01 pm to
Because this information was expected and was already baked in to the price.
Posted by lsu xman
Member since Oct 2006
16456 posts
Posted on 7/28/18 at 11:13 am to
Intel killed the market on Friday.
Posted by Joshjrn
Baton Rouge
Member since Dec 2008
30174 posts
Posted on 7/28/18 at 11:40 am to
quote:

Best GDP number in 45 months.

The Dow should be up >250 points


Good Trumpkin. Now roll over!
Posted by lynxcat
Member since Jan 2008
24751 posts
Posted on 7/28/18 at 11:52 am to
If it was already baked in and was as expected, then it implies that there should not have been any price movement as the market would already have the securities accurately priced...
Posted by Joshjrn
Baton Rouge
Member since Dec 2008
30174 posts
Posted on 7/28/18 at 12:28 pm to
quote:

If it was already baked in and was as expected, then it implies that there should not have been any price movement as the market would already have the securities accurately priced...


The Dow tracks 30 companies. That's it. Why people act like it's some magic shorthand to tracking the entire economy is beyond me.

LINK /

Some of those companies go up on a given day; some of those companies go down. Some of that movement is due to the economy at large; some of that movement is due to discrete issues pertaining to the companies in question in the singular.
Posted by Powerman
Member since Jan 2004
166338 posts
Posted on 7/28/18 at 12:35 pm to
quote:



The Dow tracks 30 companies. That's it. Why people act like it's some magic shorthand to tracking the entire economy is beyond me.

Right

What's the best way to track overall market performance?

Is the Vanguard Total Stock Market ETF a pretty reliable tool?
Posted by Joshjrn
Baton Rouge
Member since Dec 2008
30174 posts
Posted on 7/28/18 at 12:43 pm to
quote:

Right

What's the best way to track overall market performance?

Is the Vanguard Total Stock Market ETF a pretty reliable tool?


To track overall domestic market performance? Absolutely. But VTI is still not a reliable tool for the economy at large, in my opinion.
Posted by NC_Tigah
Make Orwell Fiction Again
Member since Sep 2003
131773 posts
Posted on 7/28/18 at 12:45 pm to
quote:

What's the best way to track overall market performance?

Is the Vanguard Total Stock Market ETF a pretty reliable tool?
Quite.

Or the S&P.
Posted by buckeye_vol
Member since Jul 2014
35359 posts
Posted on 7/28/18 at 2:26 pm to
quote:

To track overall domestic market performance? Absolutely. But VTI is still not a reliable tool for the economy at large, in my opinion.
I’m not following you. Why would any fund made up of stocks, follow the broader economy? And why would we want it follow anything but the market the ETF is investing in, especially since that market grows much faster than the broader economy?
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