Worst. Economic. Reading. Ever! đź’Ą

by 31 Jul, 2020

Worst. Economic. Reading. Ever!

The damages have been totaled, and the United States’ gross domestic product (the value of the entire nation’s productivity) collapsed a titanic nine percent this quarter. The annualized 32% plunge is unrealistic, but not out of contention, as this is still the worst it’s been since the 1940s.

The hit to gross domestic product was two-thirds driven by personal spending pain as businesses shuttered and citizens were told to venture out for essentials only.

The market is keen to know why the print was so bad this quarter. It’s probably because it comprised an end-to-end global pandemic, not the just the start or end of one. If investors cared, though, this Invstr Crunch would be all about a flash crash rather than just dusty economic data.

You might argue that a correction is needed to account for the incredible drop in production, spending, and employment. You could argue that where markets will roar as an awesome third quarter beckons relative to the second, or you could argue that stocks don’t need to crash to correct; instead serving a stop-go penalty by trading flat until another break out again in Q4.

It’s really hard to predict!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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