Two very important updates on the U.S. economy will be reported this Friday. Both fourth quarter GDP and durable goods are reported. To be clear, we still think Wall Street doesn’t yet fully appreciate how fast the economy is growing. In addition, the logical investing implication of this growth is a stronger U.S. dollar.
Here’s a quick “Us vs. Them” comparison on fourth quarter GDP estimates (on a quarter-over-quarter basis):
- Hedgeye: 2.91%
- Wall Street consensus: 2.2%
- Atlanta Fed GDP Now: 2.8%
In other words, we’re even more bullish than the rosiest forecast from bureaucrats at Fed!
Now that’s a shocker…
WHAT TO BUY
The U.S. dollar will be a big beneficiary of this acceleration in the U.S. economy. As we’ve said many times before, a stronger U.S. economy equals a stronger U.S. dollar. We also like the Industrials sector (XLI).