Post-FOMC meeting, investors are likely to focus on economic data

Post-FOMC meeting, investor attention is likely to focus on economic data, which has so far been disappointing during the last half of 2015, including industrial activity and retail sales.

We anticipate growth in the United States should remain solid, with consumer spending likely to improve due to the lagged effects of lower gasoline prices and because manufacturing activity is likely to stabilize and improve as the inventory cycle improves.

Central bank policies remain at the forefront of investor minds, especially since the European Central Bank disappointed investors recently with a relatively anemic extension to its own quantitative easing (QE) program. Consumer and small business confidence remains stable and retail sales improved in November. When we adjust the relatively modest retail sales for inflation, underlying activity appears strong.

Growth in key developed economies, particularly Europe and Japan, was positive in the third quarter, indicating they appear to be continuing to accrue the benefits of QE. Particularly positive was the adjustment to Japan’s third quarter growth from a decline, which would have indicated recession, to annualized growth of 1%. Both economies appear poised to maintain relatively solid economic growth despite headwinds from debt deleveraging.

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Robert L. Haworth, CFA, is a senior investment strategist and Darrell Behnke is the Madison market leader for the Private Client Reserve of U.S. Bank.

This information represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific advice or to be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation. The factual information provided has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. The organizations mentioned in this publication are not affiliates or associated with U.S. Bank in any way.

Past performance is no guarantee of future results. All performance data, while deemed obtained from reliable sources, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for investment.

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