PREVIOUS TRADING DAY EVENTS 28 Sep 2023

The U.S. Economy is growing at a stable and good pace as reports show for the second quarter, and activity appears to have accelerated. However, it is currently threatened by a looming government shutdown and an ongoing strike by auto workers.

The markets are facing a sticky inflation and strong labour market with the number of Americans filing new claims for unemployment benefits rising slightly. Expectations for future rate hikes are rising.

The big news is not that nothing has changed, but that the economy remains resilient, inflation remains elevated and the Feds worstcase scenario, stagflation, has been avoided for now, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. Given how much the Fed has raised rates, its impressive that the economy is still growing at this pace.

The reports show that the U.S. Gross Domestic Product GDP increased at an unrevised 2.1 annualised rate last quarter, in line with economists expectations. The economy is expanding at a pace well above what Fed officials regard as the noninflationary growth rate of around 1.8.

Overall it now looks like there is more excess saving currently left over for consumers than we had seen before the latest revisions, which is a favourable sign for the economy, said Daniel Silver, an economist at JPMorgan in New York. Upward revisions to recent data on corporate profits also are a favourable sign with…