Investors are getting a gift today. Stock market indices were down as much as 2% today, but the U.S. economy is accelerating.
We say buy the dip.
That’s been our mantra on every stock market pullback for the past seven months now. The S&P 500 is up 7% in the last six months, and Nasdaq is up 14.4% since then.
There’s good reason for this. In the first quarter of 2015, year-over-year GDP peaked at 3.3%, fell to 1.3% by the second quarter of 2016, and has since rebounded to 2.1% in the first quarter of 2017.
“This is what economic growth has done. This is not subject to partisan politics,” says Hedgeye CEO Keith McCullough in the video above from The Macro Show this morning.
“This is the main reason you’re making money being long growth stocks is because U.S. growth accelerated,” McCullough says. We expect the U.S. economy to continue to go up from here. “And before you know it you’re going to have close to 3% GDP growth, just as the IMF takes down their forecast,” McCullough says.
“I like that.”