2019 GDP Growth - China Expects Between 6% And 6.5%

2019 GDP Growth - Slight Tuesday Decline

Before getting into 2019 GDP Growth, let's review the stock market. The stock market fell again on Tuesday. S&P 500 fell 0.11%, Nasdaq fell 2 basis points, and Russell 2000 fell 0.45%. 

Bears are always quick to jump on any move lower after a long winning streak. They tend to get overly excited about what usually ends up being a modest correction. 

This time the stock market was met with positive economic news from the ISM, but it still fell. These small moves are occurring because the market is very overbought, not because there has been a big change in how most investors view the economy.

As you can see from the chart below, the McClellan summation shows the stock market has excessive optimism. 

In the next 1 month, the S&P 500 falls 1.62% with a 39% win rate on average. I could see a modest correction in March considering how far stocks have rallied. If stocks fall modestly and the economic data follows the ISM report, I will switch to being bullish.

(Click on image to enlarge)

It wasn’t a risk-off day as utilities and consumer staples fell. Biggest winners were communication services and real estate which increased by 0.73% and 0.24%. The biggest losers were the industrials and materials which fell 0.64% and 0.51%.

2019 GDP Growth - Great Target Earnings

Target final reported its Q4 2018 earnings. They were very good. With both Wal-Mart and Target doing well, it’s fair to say the consumer is healthy. 

This supports the solid 2.8% personal consumption growth in Q4. Target reported $1.53 in EPS which beat estimates by a penny. It had $22.98 billion in revenue which beat estimates by $20 million. Same-store sales growth was a fantastic 5.3% which beat estimates for 5.1%.

Sales at physical stores were up 2.9% and online sales were up 31%. E-commerce added 2.4% to same-store sales growth. In 2018, same-store sales growth was 5% and e-commerce was up 36%. That was the fastest same-store sales growth since 2005. 

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