The Stocks That Are Most Attractive After January’s Sell-Off

sellbuyMoe Zulfiqar: The theme since 2010 has been very simple: the U.S. economy is witnessing economic growth. As a result of this, the stock market increased and broke above its previous highs made in 2007. Investor optimism soared, and those who were bearish saw their stock portfolio disappear.


As the new year, 2014, began, the theme became a little more complex: the U.S. economy is going through a period of economic growth, but it’s becoming questionable. The question asked by investors these days: is the U.S. economy headed for economic slowdown, and is the stock market—which has provided investors with great returns—about to see another downturn?


The economic data that suggested the U.S. economy is growing has started to suggest this may not be the case anymore. For example, after the financial crisis, the unemployment rate in the U.S. economy declined. It meant more people were getting jobs and they had money to spend—the kind of jobs created and if they made any impact is still up for debate. In December, we heard that only 75,000 jobs were added to the U.S. economy, and in January, this number was only 113,000. (Source: “The Employment Situation,” Bureau of Labor Statistics, February 7, 2014.) The number of jobs added to the U.S. economy has missed the market estimate by a huge margin for two months in a row, and the growth compared to the early part of 2013 isn’t very impressive.


The gross domestic product (GDP) growth rate of the U.S. economy doesn’t look so impressive, either. We have created a table to show how it has been declining. Look below:


Year
Real GDP in $ Billion
% Change from Prior Year

2009

14417.9

-2.802%

2010

14779.4

2.507%

2011

15052.4

1.847%

2012

15470.7

2.779%

2013

15767.1

1.916%


Data source: Federal Reserve Bank of St. Louis web site,

last accessed February 7, 2014.


Looking closely, you’ll notice the GDP growth rate in 2013 was 0.863% lower compared to 2012. Looking at the percentage change, it shows the U.S. economy’s growth rate decelerated by more than 31%. This is something that shouldn’t go unnoticed.



(...)Click here to continue reading the original ETFDailyNews.com article: The Stocks That Are Most Attractive After January’s Sell-Off [General Electric Company(NYSE:GE)]

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)





Sign Up

Get the InvestingChannel
Free e-Letter Today

Learn More

Independent market opinion, analysis and ideas - delivered every business day

Premium market opinions, analysis, and ideas - delivered every business day

Editor's Picks