Powell Expects Strong Growth

Lots of earnings reports will be coming out this week. There was good news over the weekend. The U.S. administered 4.6 million vaccine doses on Saturday. That’s a record. Let’s hope this trend continues.

In business news, Microsoft is buying Nuance for $16 billion. The buy-out price is $56 per share which is a 23% premium to Friday’s close. I’m glad to see that despite the rally, firms are willing to open their pocketbooks.

The stock market is down a bit this morning but not too much. The S&P 500 closed at an all-time high on Friday. It’s closed higher six times in the last seven sessions. Ryan Detrick points out that over the past 22 quarters the S&P 500 has been higher in 19 of them.

Moody’s (MCO) got to a new high this morning. The company said it will report earnings on April 28.

On Sunday, Jerome Powell was interviewed on 60 Minutes. He had good things to say about the economy, but he cautioned that areas of the stock market could be over-priced. It’s in the nature of Fed chairs to warn of such things.

Scott Pelley: What are your projections for growth and employment?

Jerome Powell: If you look at what private sector forecasters are saying or what forecasters who sit around this table who are on the Federal Open Market Committee, our rate setting committee, what they’re forecasting is growth for this year in the range of 6% or 7%, which would be the highest level in, you know, 30 years. Or even maybe a little bit higher. And forecasting unemployment to move down substantially from 6%, where it is now, maybe to between 4% and 5%.

Scott Pelley: It seems like you’re not expecting a recovery, you’re expecting a boom.

Jerome Powell: Well, I would say that this growth that we’re expecting in the second half of this year is going to be very strong.

Posted by on April 12th, 2021 at 9:53 am


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