Can the economy continue to thrive amidst high interest rates?
- Wall Street bracing for more strong U.S. economic and inflation data
- First revision to fourth-quarter GDP due next Wednesday
- Fed’s preferred inflation gauge to be released on Thursday
- JPMorgan Chase raises GDP tracking estimate to 3.3%
- Morgan Stanley expects core PCE to come in around 0.4%
- Economy expanding at an above-average rate
- 10-year Treasury yield near highest level in almost three months
- Nasdaq Composite approaching first record close in over two years
- February brings solid U.S. data, including nonfarm-payroll gain and hotter-than-expected consumer-price index
- Bullish outlook on stocks as long as earnings remain strong
Another round of robust U.S. data is set to arrive next week, raising questions in the financial market about whether the economy can continue to avoid buckling under the weight of the highest interest rates in over two decades. The first revision to fourth-quarter gross domestic product is set to be released next Wednesday, followed the next day by January’s reading on the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures, or PCE, price index. JPMorgan Chase & Co. has raised its tracking estimate for GDP during the final three months of 2023 to 3.3%, unchanged from the government’s initial estimate released last month. Meanwhile, a team at Morgan Stanley expects January’s core PCE to come in around 0.4% on a monthly basis, versus December’s 0.2% reading, and inflation to remain on a “bumpy path” toward a 2.3% year-over-year core rate for 2024. On Thursday, a pair of S&P Global surveys revealed that the economy expanded at an above-average rate this month. The 10-year Treasury yield is near its highest level in almost three months, and the Nasdaq Composite is approaching its first record close in more than two years. February has already brought solid U.S. data, including a surprising nonfarm-payroll gain of 353,000 and a hotter-than-expected consumer-price index report. Despite concerns about inflation, there is a bullish outlook on stocks as long as earnings remain strong.
Factuality Level: 2
Factuality Justification: The article provides some relevant information about upcoming economic data releases and market expectations. However, it contains unnecessary background information, such as the details about specific companies’ estimates and stock performance, which are tangential to the main topic of economic data and interest rates. The article also includes some opinionated statements from individuals in the financial sector, which may not represent universally accepted truths. Overall, the article lacks depth and focuses more on market speculation rather than providing a comprehensive analysis of the economic indicators.
Noise Level: 3
Noise Justification: The article provides relevant information about upcoming economic data releases, forecasts, and market reactions. It stays on topic and supports its claims with data and quotes from experts. However, it contains some repetitive information and lacks in-depth analysis or exploration of broader consequences.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the impact of robust U.S. data on the financial market, particularly the economy’s ability to withstand high interest rates. It mentions JPMorgan Chase & Co. and Morgan Stanley as institutions providing estimates and analysis.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article focuses on the potential impact of economic data on the financial market, but does not mention any extreme events or their impact.
Public Companies: JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), S&P Global (undefined)
Key People: Daniel Silver (economist), Tom Graff (chief investment officer at Facet)
Reported publicly:
www.marketwatch.com 
