Wall Street Just Hit New Record Highs. Here’s Why.

11/27/2019
Source: Forbes
by: Sergei Klebnikov

Major stock market indexes hit fresh highs on Wednesday, as improved U.S. economic growth in the third quarter, solid consumer spending last month and renewed optimism on Wall Street over a trade deal with China have all dampened fears of a recession.

The S&P 500 was up 0.27% while the Dow Jones Industrial Average rallied 0.19%, helping both indexes continue a record-setting run that has seen several new highs over the past month.
Much of the market optimism was due to stronger-than-forecast economic data, suggesting that the economy will continue its moderate pace of expansion in the fourth quarter.
The latest indicators showed that U.S. GDP grew by 2.1% in the third quarter—up from a previous reading of 1.9%—and also indicated that the slowdown in business investment could be stabilizing.
Economic prospects were further improved by a rise in U.S. consumer spending last month, while the number of Americans filing unemployment claims also fell, helping further diminish recession risks in the short term.
The robust economic data added to rising optimism on a trade deal with China, thanks to Trump’s comments on Tuesday that the U.S. was in the “final throes” of the important phase one agreement.
To add to the market’s recent rally, third-quarter corporate earnings have come in better than expected: Of the 484 companies in the S&P 500 that have reported earnings, 75% have beaten estimates, compared to 18% that have missed, according to Refinitiv data (in a typical quarter, only 65% of companies beat estimates and 20% miss expectations).

READ FULL STORY