Wall Street turns to economy as Fed exits QE
Now that the Federal Reserve has confirmed that it is ending its bond-buying program, known as quantitative easing, or QE, Wall Street can get back to focusing on how fast the economy is growing and how much money U.S. companies are making.
The next wave of market-moving information comes today, when the government reports its first read on third-quarter gross domestic product, or GDP.
Last quarter, the U.S. economy rebounded from a dreary first quarter and grew at a peppy 4.6% rate.
While Wall Street isn't expecting a repeat of that kind of turbo-charged growth in the third quarter, experts are expecting a very respectable 3% gain, which is viewed as solid growth compared with the lean days following the Great Recession.
Investors are also expecting the current trend of fewer people lining up for first-time jobless benefits to continue as well. Economists estimate that 281,000 Americans will file for first-time jobless claims, down from 283,000 the prior week, UBS says.
The earnings parade also continues. So far, 75% of the companies in the Standard & Poor's 500-stock index have topped third-quarter estimates, above the long-term 'beat' average of 63%. Key reports to watch today include Kellogg, MasterCard, Expedia and Starbucks.
Investors will be watching to see if earnings and the economy are strong enough to overcome the reduction in Fed stimulus.
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