Earning season is alive and well. Twenty percent of the S&P 500 companies have reported earnings. We, at Fi Plan Partners, like to keep you informed with our weekly vlogs and through social media. If you don’t follow us, we encourage you to do so as you can stay up to date with us about the markets and what’s going on in real time. Yesterday we posted an economic calendar for the upcoming week. This week, on Wednesday, we have the important manufacturing and new home sales reports coming out. Then, on Thursday, the weekly jobless claims and on Friday the Consumer Confidence Index will post. Also, on Friday, the 3rd quarter GDP will be released.
Typically, the first report of GDP can be misleading. This 3rd quarter GDP adds an extra level of importance since we have the midterm elections coming up in a few weeks. Both parties like to talk about economic growth but disagree on the subject. This GDP number could will likely be emotionally driven. The earnings have been great, however, the market has been down the last few weeks. If the GDP is not what is expected, people might view that as the economy slowing down and become more active in selling off their positions. If the GDP is strong, people might think the economy is too inflationary. This one will be unique because of all the information wrapped around the election.
Student Loan Debt
Over the weekend we looked at some research (click here to read article) on Investor’s Business Daily by Cabot Phillips and found that the student loan debt and whether this could potentially be the formation of the next financial crisis. In the U.S., the total student loan debt, $1.5 trillion, is now larger than the GDP of 95% of the countries in the world. During the four to five-minute time that we are sitting here talking on this vlog, $1.2 million in student loan debt will be added to that number. The main concern is the repayment of debt and could very well be the next big issue in the economy. Millennials are spending $20 less a day than people their age 10 years ago. By this time, historically, millennials should be buying houses but instead are dealing with their student debt. The student debt has minimized this generation’s wave of house purchases and eventually could have a large impact in the market.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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