U.S. markets not looking good, however Goldman Sachs shares a more positive outlook

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  • 6 months ago
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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