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Stocks Are Set To Slingshot To Record Highs

Sam Ro   

Stocks Are Set To Slingshot To Record Highs
Stock Market1 min read

new york stock exchange tradersREUTERS/Lucas JacksonTraders laugh as they work on the floor of the New York Stock Exchange as the market closes in New York October 17, 2014.

US futures are looking up.

Dow futures are up 70 points. S&P 500 futures are up 7 points.

Assuming markets open in this direction, we should see all-time highs. The S&P 500's all-time high was set at 2,079 on Dec. 5. The Dow set an all-time high of 17,991 that same day.

The rally follows a strong upward revision to US GDP.

In Q3, the pace of GDP accelerated to 5.0%, which is the fastest pace since Q3 2003. This was up from an earlier estimate of 3.9%, and it was much stronger than the 4.3% forecast by economists.

Growth was driven by personal consumption, which was revised up to 3.2% from an earlier estimated of 2.2%.

"Growth won't be quite as strong in the fourth quarter. Indeed, November's durable goods orders figures suggest that business investment has slowed significantly, from 11.0% in the third quarter," Capital Economics Paul Dales warned.

Dales cited today's November durable goods order report, which disappointed. Orders unexpectedly fell 0.7% in during the month, which was much worse than the +4.0% expected by economists. Nondefense capital goods orders excluding aircraft, or core capex, went nowhere; economists were looking for 1.0% growth.

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