After a disappointing third-quarter reporting period, analysts are projecting that fourth-quarter U.S. earnings will decline for the first time in two years as rising interest rates and slowing growth further dampen the outlook.
While investors seek shelter in more defensively oriented equity names, one market technician sees the Dow’s growing margin of outperformance over the S&P 500 and Nasdaq as a sign that the latest rebound in stocks might fade away quickly like the last one did.
Producer Price Index data out Tuesday shows another sign that inflation is cooling. PPI for final demand increased 8.0% in October from a year ago. The increase came in below expectations and is lower than the year-over-year increase in September.
Thursday’s GDP report shows the U.S. economy grew at an annual rate of 2.6% in July, August and September, after shrinking in the first half of the year.
Some hints that U.S. price pressures are beginning to ease even as overall inflation remains high could encourage Federal Reserve policymakers to opt for smaller interest rate increases after they deliver a fourth straight supersized hike next week.