Bank Earnings Clear Path for Record Highs in US Stocks
The US economy remains on firm footing even if slowing. That’s enough to push stocks to new record highs.
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Bank earnings demonstrate that the US economy likely has enough forward momentum to overcome recent energy supply disruptions and a short oil price shock. It’s a green light for stocks to extend their rally to new highs.
Estimates for US economic growth from the Atlanta Fed’s GDPNow tracker are a bit worrying — slowing to 1.3% from over 3% initially estimated for last quarter’s data. While big bank earnings support a better-than-expected outlook, some of the details indicate a slowdown is in the works.