30th December 2016
In light trading volumes ahead of the Christmas break most equity markets ended the week with small gains.
The Dow Jones climbed to a new all-time high on Tuesday (20 December) of 19,974.62, just shy of the psychologically important level of 20,000, before falling back slightly.
US GDP growth for the third quarter was revised upwards from an annualised growth rate of 3.2% to 3.5% – lifting the year-on-year growth rate to 1.7% – helped by stronger consumer spending, business investment and government purchases. Although this growth rate is unsustainable (forecasts for the fourth quarter are currently for annualised growth of 2.2% as the third quarter was helped by a large surge in agricultural exports), the revisions show the US economy is growing sufficiently to justify the recent US interest rate increase.
Likewise the UK’s third quarter GDP growth was also revised upwards, from 0.5% quarter-on-quarter to 0.6%.
Ian Copelin, Investment Management Expert*
*Ian Copelin is an Investment Director at Wealth at Work Limited which is a member of the Wealth at Work group of companies