The Big Number
The number of quarters since the prior peak in real U.S. Gross Domestic Product (GDP).

Market Notes
While the impeachment debate dominated the airwaves, market participants focused on U.S. growth.  The overall picture is muddier than it was 3 months ago, but signs point to a still resilient consumer.  That is much more important to markets than U.S. politics at the moment.

The Markets’ Reaction
Stocks sold off mid-week on weak manufacturing data and indications that service sector growth may be slowing as well. A late-week rally, fueled by the better than feared jobs report, left the S&P 500 (SPX) off -0.3%. Bond prices were up and yields down, nearly reversing the September rate rise.

What this means
The market continues to worry that the slowdown in global growth will catch up with the U.S.  But while the current expansion is the longest since World War II, total GDP growth has trailed that of other post-recession periods.  There appears to be no reason we are “due” for a recession despite what many in the market and the media believe.

What to Watch
Trade talks with China are set to start in the U.S. this week.  The impeachment hearings will roll on, adding another layer of unpredictability.  Data releases include the U.S. Consumer Price Index on Thursday and the University of Michigan Consumer Confidence Index on Friday.

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