President Donald Trump has made plenty of bold statements. One of his boldest is possibly the 4% gross domestic product (GDP) growth rate he wishes to achieve.
While it is a worthwhile goal, consider that the last time the U.S. GDP annual growth rate topped 4% was back in 2000 — nearly two decades ago.
So this will be a substantial achievement if he can pull it off.
But this year is off to a rough start.
Take a look at estimates for first-quarter GDP growth — specifically the green line.
Early estimates in January pegged the growth rate at being north of 2% and even more than 3% at one point.
But as economic data continues to be revealed about the past quarter, expectations have steadily decreased, and right now estimates sit at an expected growth rate of just 1.3% according to the Atlanta Federal Reserve’s GDPNow forecast — the most accurate GDP forecasting tool out there.
We won’t get the official estimate on first-quarter GDP until the end of April, but if Trump ultimately fails to boost our annual GDP — not just for one quarter, but for the year — the stock market will have a hard time maintaining this eight-year bull market.
If he accomplishes his goal, then the rally will carry on.
Only time will tell.
In the meantime, many of the strategies we offer are designed to thrive in any market environment, such as my premium strategy, Automatic Profits Alert, which never experienced an overall losing year in a 10-year backtest — that’s even during the 2008 financial crisis.
So there is no concern performance-wise about how this all shakes up — it’s just something to keep an eye on.
Chad Shoop, CMT
Editor, Automatic Profits Alert