In This Article:
The New York Fed's nowcast for Q2 GDP rose to 2.42%, up from 2.34% last week, offering a welcome backdrop as major equity ETFs claw back losses.
The Fed's Nowcast modelwhich factors in retail sales, industrial production and labor?market indicatorswas revised higher on positive trade data, though it remains below April's peak of 2.72%. The upgrade suggests the U.S. economy is maintaining momentum despite mixed signals elsewhere.
Equity markets could potentially respond favorably: the SPDR S&P 500 ETF Trust (SPY) has outpaced the index over one week (0.85% vs. 0.80%) and one month (13.45% vs. 13.36%), trimming its year-to-date drawdown to 3.90% compared with the S&P 500's 3.96%. Meanwhile, Invesco QQQ (NASDAQ:QQQ) led tech-heavy gains with a 1.09% one-week return and 17.03% over the past month, narrowing its YTD decline to 4.75% versus 3.94% for the benchmark.
Why It Matters: A stronger GDP outlook paired with a rebound in SPY and QQQ suggests investors may regain confidence in a soft-landing scenario, supporting further equity gains.
This article first appeared on GuruFocus.