This week in the markets
- Fourth-quarter 2018 gross domestic product (GDP) grew at an annualized rate of 2.6%, beating analysts’ expectations. This measurement helps gauge the health of the US economy, and things are looking good.
- Despite better-than-expected earnings reports, some leading retailers are planning store closures and job cuts.
- Weight Watchers is down 35% after weak earnings. The CEO says the Keto diet could be to blame.
Fourth quarter GDP grew at a solid pace
Real GDP, which is the value of all goods and services produced by our economy, grew at an annualized rate of 2.6% in the fourth quarter of 2018. The report was released by the Bureau of Economic Analysis on Thursday and beat the expectations of many experts. Overall economic growth in 2018 was strong. The Real GDP grew at a pace of 3.1%, which beat the 3% targeted by government officials. GDP is one of the primary indicators used to assess the condition of the US economy, and the numbers are looking good for MoneyLion investors! Economic growth helps improve our daily lives, including providing job opportunities and higher wages.
However, it’s important to remember that the economy and the market are not the same thing. Despite the strong GDP report, the markets seemed rather unimpressed on Thursday. The S&P 500 decreased 0.28%, the Dow Jones Industrial Average (DJIA) was down 0.27%, and the Nasdaq fell 0.29% at Thursday’s close.
Retailers are in need of therapy after mixed earnings
Some major retailers released their earnings reports to mixed results this week, including JCPenney, Macy’s, and Best Buy. Here’s what’s happening:
- JCPenney reported fourth-quarter earnings and sales for 2018 which were higher than many analysts’ expectations. However, the company declined to provide a 2019 forecast for improving its financial performance, which has been steadily declining over the years. It also announced plans to close 18 low-performing department stores in 2019.
- Macy’s fourth-quarter earnings and sales for 2018 also topped analysts’ estimates. However, the department store still announced plans to eliminate 100 management positions in order to cut costs and improve profitability. Is Macy’s losing its magic?💫
- Best Buy released a better-than-expected earnings report this week too. The electronics retailer got a boost during the holidays from the sale of smart home devices, appliances, and the popular video game Fortnite. Don’t mess with the Geek Squad.
Weight Watchers lost more than pounds
Weight Watchers was down 34% on Wednesday after the company reported poor earnings and sales. The CEO blamed their sudden loss on the Keto diet, a popular weight-loss regimen that eliminates bread and carbs. Turns out not everybody loves bread as much as the company’s famous spokeswomen Oprah Winfrey. 🥖
And now for your weekly Lionomics wrap-up. 🤓 🤓
Lionomics: Finance made easy
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