US GDP overlooks predict with closing quarter rise of 1.9%

The USA economy grew at an annual pace of 1.9% in the fourth quarter of a year ago, according to official figures.

That has been slower in relation to the 2.2% growth rate economists have been anticipating and below third quarter increase of 3.5%.

Leader Donald Trump has guaranteed to raise GDP growth to 4%, through tax reductions and facilities spending.

The most recent moment that Us’s economy grew at that rate was in 2000, the year of the dot-com boom, when it expanded by 4.1%.

However, John Ashworth, key US economist at Funds Economics, said the slowdown wasn’t an underlying cause for alarm because the final half of the year was heavily influenced by way of a temporary swing in exports.

Although she cautioned: “With the president less than one week in-office and with essential global trade arrangements, including using the UK, still yet to be decided, it’ll be a little while before we start to see the true effect of Trumponomics.”

In the third quarter there had been a increase in soybean exports which was perhaps not replicated in the finished three months of the twelvemonth. He said: “we might be wary of studying too much into the slowdown in GDP growth.”

UK Prime Minister Theresa May Possibly is meeting Mister Trump on Friday, where post-Brexit commerce chances are expected to be discussed.

Nancy Curtin, chief investment officer at Near Brothers Asset Management, said the data highlighted the way in which the heightened political environment in the usa and Europe had “put a bit on US increase”.

Fri amount is the first estimate of economic progress and is based on imperfect info. An updated estimate will be released on 26 February.

She added: “Growth in jobs and also the economy are the primary concerns of the new US administration along with the rates of increase that have been mentioned are quite affirmative.

Optimism about Mr Trump’s economic policies has fuelled a rise to the stockmarket, which this week sent the Dow Johnson Professional Average through 20,000 for the very first time.

Full-year growth of 1.6% locations the United States on the other side of the Britain, which this week documented that GDP rose by 2% last year. British out-put also grew before Germany, the socalled engine room of the European market, which expanded by 1.9% this past year.

The UK can-not negotiate trade deals with additional nations until it leaves the European Union, but Mister Trump has said he needs a “fast” deal after that.

Dow Jones industrial average vs. S&P 500: ​Which index is better?

With both the Dow Jones industrial average and the Standard & Poor’s 500 index hitting new records this year, you may be wondering what the difference is between these two benchmarks.

Both comprise large publicly traded U.S. companies that taken together, represent the performance of the broader market. When you hear people say “the market” is up or down by a certain number of points, they’re usually talking about the Dow Jones index.

On any given day, when you compare their performance, the percentage gains and losses typically appear to be close. However, when you take a close look at their long-term performance, you can see the S&P 500 index handily outpaced the Dow Jones industrials. According to Morningstar, as of late July, the Dow is up 13 percent in the past year, while the Standard & Poor’s 500 has gained 21 percent.

The Dow Jones industrial average is a price-weighted average (meaning the higher an included company’s stock price, the bigger the impact of its price movement on the overall index) that’s made up of just 30 large companies. It was created by Dow Jones & Co. co-founder Charles Dow and first calculated in 1896. Today, the Dow is maintained by a selection committee at its current owner, S&P Dow Jones Indices, a unit of McGraw-Hill Financial (MHFI).

Although the term “industrial” is included in the Dow’s name, it’s really broader than that. Industrial sector stocks account for only about 20 percent of the index. But this index doesn’t contain stocks of companies in the utility or transportation sectors because separate Dow Jones indices cover those sectors.

The top 10 stocks represented in the Dow as of the end of May 2014 are: Visa (V), IBM (IBM), Goldman Sachs (GS), 3M (MMM), Boeing (BA), Chevron (CVX), United Technologies (UTC), Caterpillar (CAT), Johnson & Johnson (JNJ) and McDonald’s (MCD).

The S&P 500 index, however, is a market-cap-weighted average and is far more inclusive. It comprises 500 U.S. companies also selected by S&P Dow Jones Indices. Again, the goal is to represent the broad U.S. economy.

Companies also must meet certain objective criteria. For example, they must have an unadjusted market cap of at least $5.3 billion, and they must have positive earnings when you add up the most recent four quarters. The top five stocks in the S&P 500 index are Apple (AAPL), Exxon Mobil (XOM), Microsoft (MSFT), Johnson & Johnson and General Electric (GE).

The S&P 500 index was originally created in 1957 and was the first U.S. market-cap-weighted index. That means each stock influences the index in proportion to its market valuation (the total value of all stock outstanding of a company). By calculating the index in this manner, it’s a company’s total capitalization, not its stock price (as in the Dow) that influences the index.

One advantage of doing this is that when a company decides to split its stock, it has no impact on the S&P 500 because its market cap remains the same. The top third of the S&P 500 consists of about 170 stocks.

Alternatively, the Dow’s price weighting means a $1 move in any of its 30 stocks will move the index by an equal number of points. So, when a higher-price stock, say $200 per share, gains 1 percent, or $2, it will have a bigger impact on the index that when a $20 stock makes the same gains (1 percent would be only a 2o-cent move).

For example, a 1 percent gain in Visa or IBM would move the Dow Jones much more than similar gains in Johnson & Johnson or McDonald’s. The top three or four stocks in the Dow Jones can account for a third of the index’s movement in any given day.

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Since the S&P 500 better represents the broader U.S. economy and includes many more companies, it’s no wonder it’s regarded as the single best gauge of large-cap U.S. stocks. Over $1.6 trillion of assets are invested in S&P 500 index funds, and about $5.7 trillion is invested in portfolios that use this index as their benchmark.

Customer credit sees further increase

Borrowing on charge cards, loans and overdrafts rose in December, amounts from banks demonstrate, amid concern over personal debt amounts.

In November, Bank of England governor Mark Carney stated: “We are going to stay vigilant around the matter, because we now have realized this change.”

The BBA, which represents the major High Street banks, said this is pushed by demand for cheap unsecured loans.

The Bank of England has vowed to keep close track of private debt amounts.

The net upsurge in credit was 330m in December, the BBA figures reveal.

But, the BBA said that doubt concerning the economical and political climate in 20 17 could cause consumers having a more safety first strategy.

“In general, we have observed high rates of customer and company borrowing, although there are early indications that 2017 might see gentler need for credit from business and families, as they anticipate potential interest rate rises and await further quality on Brexit,” said Rebecca Harding, the BBA’s chief economist.

Analysts at Capital Economics said recently there is not any need to panic over family debts.

The cost of servicing debts in comparison with family earnings was still low and manageable, it stated. Interest levels would need to grow somewhat to raise this cost to the amounts observed in 2008.

Individual figures from the Council of Lenders projected that gross mortgage lending reached 20.4bn in December.

This is 4% lower than Nov and 4% higher than December 2015. It brought the estimated total for the year to 246bn, a-12% increase about the prior yr and also the highest annual gross lending figure since 2008.

Nasdaq Forum Site Hacked, Email Addresses And Usernames Compromised

NEW YORK (Reuters) – Cyber-criminals targeted Nasdaq OMX Group’s community forum website and gained access to the email usernames and passwords of the members of the site, which took two days to come back online on Thursday evening.

The New York-based exchange operator said in an emailed letter to users of the forum that no e-commerce or transactions of any kind were taking place on the website. The forum was open to the general public to join.

Nasdaq spokesman Joseph Christinat could not say how many people’s information may have been compromised.

The cyber-attack happened on Tuesday, the same day a report was released saying that around half of the world’s securities exchanges had been targeted by cyber-attacks last year.

Cyber-crime appears to on the rise both in terms of sophistication and complexity, widening the potential for infiltration and large-scale damage, the report, by the International Organization of Securities Commissions’ research department and the World Federation of Exchanges Office, said.

A major attack could result in widespread public mistrust and a retreat from the markets, it added.

On Thursday, Wall Street firms, along with exchanges and regulators, held a simulated cyber-attack in order to help participants prepare to combat the real thing. The drill, named Quantum Dawn 2, was organized by the Securities Industry and Financial Markets Association.

Nasdaq said in the letter to its forum users that it was upgrading and restoring the forum website, where users can discuss issues such as market moves.

The exchange said all passwords expired and asked that members update any other accounts that may have the same passwords.

Nasdaq has been targeted by cyber crime in the past. In 2010, hackers infiltrated the exchange’s computer systems and installed software that allowed them to spy on the directors of publicly held companies, Reuters reported.

And last year in February, Nasdaq and Kansas-based exchange operator BATS Global Markets said they were hit by denial of service attacks, which seek to disrupt websites and computer systems by overwhelming the targeted organizations’ networks with computer traffic.

In October 2011, NYSE Euronext’s New York Stock Exchange website was inaccessible for 30 minutes, according to an Internet monitoring company, but the exchange said there was no interruption of service.

(Reporting by John McCrank; Editing by Leslie Gevirtz)