S&P 500 rises on strong GDP figures
US stocks rose as investors shake off fears of a recession during Thursday’s trading period.
It was another strong day for investors.
The S&P 500 rose during Thursday’s trading with most notably Tesla showing strong signs of growth, even with fears that much of the western world could go into a recession.
Thursday’s trading saw the S&P 500 gain another 1.10% and is now up 3.87% during the last 5 days of trading.
Unsurprisingly, the tech-heavy Nasdaq composite outperformed, rising by 1.76% largely thanks to the size of Tesla on the index.
Shares in the electric vehicle company rose by 11% during last night’s trading as Elon Musk’s car company is set to produce 2 million vehicles for the year.
Markets shake off fears of a recession
Despite fears of a recession, official data by the US commerce department shows the US economy actually beating expectations.
During the fourth-quarter gross domestic product (GDP) or the sum of goods and services produced between October and December rose 2.9% on an annualised basis.
This was slightly stronger than the market was expecting.
Consumer spending, which in the US accounts for nearly 70% of GDP, was up 2.3% over the quarter, raising hopes for the US economy having a soft landing.
This improving result makes eToro’s US investment analyst Callie Cox believe the US could avoid a recession.
“Consumer spending is still strong, both domestically and globally,” she said.
“It’s hard to have a recession when demand is this resilient, and that’s good news for a market that’s worried about the future of the economy.”
But the investment analysis said the high price of houses and the rising cost of debt is a stain on the economy.
“Housing demand declined for a seventh straight quarter, which isn’t a surprise given how aggressive the Fed has been,” Cox continued.
“Housing market weakness is a huge risk, but the pessimism in housing clearly hasn’t trickled into wallets yet.”
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