Last Friday, it was reported that GDP growth slowed considerably. But the good news was that it didn't grind to a halt. But if economic growth is slowing, is that a concern for the S&P 500 (SPY) as less productivity could lead to lower profit margins? The answer is no, and I will tell you why and more below in this week's market commentary.(Please enjoy this updated version of my weekly commentary published November 03, 2021 from the POWR Value newsletter).
One of the first concerns I had in March of 2020 when the proverbial "…." hit the fan was that the GDP growth was about to fall off a cliff. And it pretty much did. In the first quarter of 2020, GDP fell 5.1% from the previous quarter. Then in the second quarter, it fell another 31.2% from the first quarter. Things looked dire.
But then things were looking up for the third quarter of last year as cases started to fall in the summer and more people were out and about. In fact, GDP rose 33.8% in the third quarter.