U.S. markets not looking good, however Goldman Sachs shares a more positive outlook
- US Market
- 6 months ago
The Dow Jones Industrial Average fell on Sunday night by a further 197 points followed by the S&P500 and Nasdaq100 futures both down 100 points, hinting at a continuing sell off for this week.
The ongoing trade war between Washington and Beijing does not seem to be going away anytime soon, Huawei’s CFO arrest and the 3-year Treasury note yield breaking above its 5-year counterpart last week sparked fears that a recession is imminent.
However Goldman-Sachs seems to have the opinion that as long as consumers keep shopping there won’t be a problem for the economy.
Following Friday’s U.S. data pointing to lower payrolls but higher wage growth for a decade the bank made its point in a research note.
"Three of the key drivers of consumer spending send a positive message for the near-term outlook,"
"First, real disposable income is likely to continue its strong growth due to accelerating wage growth, and recent declines in the oil price are likely to be a significant tailwind to spending in 2019”.
"Second, the saving rate looks elevated relative to the high level of household wealth, even after the recent sell-off."
Adding that,"consumer sentiment is likely to stay elevated, reflecting strong underlying economic fundamentals as well as optimism about the labor market and income growth.”
Source: Smart Trend Team