(As of 7:25 am PST)
US stocks opened lower to start the week as surprising
news out of Japan showed that the Japanese economy fell into recession. Japan’s
gross domestic product (GDP) fell 1.6% in the third quarter, following a sharp
7.3% decline in the previous quarter. Back to back quarterly contractions in
GDP is considered a recession. The recent quarter’s contraction came as a
surprise to many economists, most of whom were projecting positive growth. The
Bank of Japan expressed that there is no need to expand its current monetary
policy programs but that it would continue to monitor the situation. Japan’s economic
woes are taking over the headlines today, overshadowing economic reports in the
US. Data on manufacturing came in below expectations, while a report on
industrial production also missed forecasts. The major US benchmarks are
struggling to find direction this morning, see-sawing around the unchanged line much like they did last week. Gold and oil prices are lower while interest
rates inched higher. With indexes at record highs, don’t expect a breakout
rally anytime soon.
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