The Q3 GDP reading of 2.2% was one of today’s major stories. It raises concern that the economy might be experiencing slowdown in high inflation conditions with a Fed that favors hawkish policies. This would normally cause stock prices to drop. However, I’m seeing multiple silver linings in the GDP report that are making me more optimistic about the growth outlook. But as we’ve discussed, these bearish headwinds are being overwhelmed by an outstanding earnings season. Earnings growth for the S&P 500 (SPY) is now expected to be 34.7%, a significant increase from 24% a couple of months ago. Thus, the S&P 500 made new highs earlier this week and is hovering near those levels. In today’s commentary, I want to cover the GDP report more in depth and connect it to trends that are emerging on conference calls during earnings seasons. Read on below to find out more….Enjoy this version of my weekly comment published on October 28th, 2021 by the POWR Stocks Below $10 newsletter.

Over the last week, the S&P 500 is up by around 1.5%. The portfolio continues to perform well, rising 2.5% in the last week despite profit taking by energy companies. These losses were offset more by the other gains.

Both the market and the economy are at an interesting point. Everyone is panicking about inflation, a deteriorating growth outlook, and the Fed’s taper. Some think the Fed has committed a grave policy mistake by tightening policy in light of the weak economy. Others see the Fed as hopelessly behind schedule.

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