How much will the partial government shutdown impact US GDP?

How much will the partial government shutdown impact US GDP?


GOT IT THANKS LIZ. SURE LOOK AT THE SHARE PRICE OF THE CITY, THE BANK THEY’VE JUST KICKED YOU HAVE A PROFITS SEASON. REVENUE DID FALL SHORT AND THEY’RE DOWN ONE PERCENT. COME ON IN BRIAN WEST BURY FIRST TRUST ADVISORS I WANT TO TALK PROFIT LET’S PUT THE CITY RESULTS AWAY FOR JUST A MOMENT. I’M TOLD THAT THE ANALYSTS ARE EXPECTING A 14% INCREASE IN BIG COMPANY PROFITS THIS YEAR COMPARED TO THE SAME PERIOD LAST YEAR. 14%. YOU AGREE YOUR NUMBER? [LAUGHTER]>>YEAH. I ACTUALLY I THINK IT IS PROBABLY GOING TO BE A LITTLE BIT HIGHER. YOU KNOW EVERY SEASON EVERY QUARTER WE GET EARNINGS REPORTS SAY 70, 75, 78% OF COMPANIES BEAT EARNINGS ESTIMATES, AND I THINK ANALYSTS HAVE OVERPLAYED THEIR HANDS. I THINK THEY’VE TAKEN THESE DOWN TOO MUCH. BUT LET’S JUST THAT I CAN THAT 14% FIGURE FOR THE FOURTH QUARTER THIS HAVE YEAR OVER THE FOURTH QUARTER OF LAST YEAR. AND REALIZE THAT THE S&P 500 IS DOWN ABOUT ABOUT 7% DURING THAT SAME PERIOD. WHICH MEANS THAT STOCK MARKET RELATIVE TO FERNINGS IS 21% CHEAPER TODAY THAN IT WAS A YEAR AGO.>>SO WAIT A SECOND BRIAN YOU CAN IF YOU DID GET OVERALL YOU GET A 14% JUMP IN PROFITS, THAT’S REAL GOOD? BECAUSE WE’VE GOT TO COMPARE IT TO THE 2025% GAINS WE WERE SEEING LATE LAST YEAR.>>WELL, THEY WERE, AND WE HAVE TO REMEMBER THAT — THOSE 20 TO 25% GAINS WERE REALLY INDUCED BY THE TAX CUT IF YOU LOOK AT UNDERNEATH PRETAX CORPORATE PROFITS, THEY’VE BEEN RISING AT ABOUT A 10% ANNUAL RATE AND I EXPECT THEM TO CONTINUE TO DO THAT IN 2019.>>OKAY. WHEN THIS — WHEN PROFITS ARE GOING UP, AND STOCKS ARE GOING DOWN, THAT MEANS THAT MARKET IS GETTING CHEAPER. IT IS THE OPPOSITE OF WHAT WE HAD IN 1999, 2,000 WHEN STOCKS WERE GOING UP AND PROFITS REQUESTER GOING DOWN. SO THIS IS I THINK, A GOOD ENVIRONMENT FOR STOCKS, WE JUST HAVE TO WAIT FOR CATALYST TO TURN THIS THING AROUND.>>TELL ME ABOUT THE GOVERNMENT SHUTDOWN WE’RE NOW GETTING INTO THE 24TH DAY. CAN YOU GIVE ME A NUMBER ON HOW MUCH IT WILL TAKE DOWN GDP HOW MUCH WILL IT TAKE OUT OF OUR ECONOMY?>>YEAH. WELL AT THE MOST, THIS IS THE WAY I WOULD LOOK AT IT THERE’S ABOUT 800,000 PEOPLE IN THE GOVERNMENT WHO ARE NOT GETTING FADE TODAY. COMPARE THAT TO 150 MILLION PEOPLE WHO ARE WORKING, SO IT’S ABOUT A HALF A PERCENT DECLINE IN EARNING BUT THERE’S TWO THINGS TO OFFSET THAT. NUMBER ONE, THE PEOPLE THAT ARE WORKING ARE ARE SEEING PAY RAISES THAT’S GOING TOOFF SET PART OF THAT. NUMBER TWO, BECAUSE THE GOVERNMENT DOESN’T HAVE TO BORROW AS MUCH TO PAY THOSE WORKERS, THAT MONEY STAYS IN THE PRIVATE SECTOR AS WELL. SO I WOULD CALL THIS A HIT OF MAYBE, MAYBE TWO TENTHS OF ONE PERCENT WHICH IN A 3% ENVIRONMENT OF GROWTH IT’S REALLY NOT GOING TO BE FELT. I DO NOT BELIEVE THIS GOVERNMENT SHUTDOWN IS GOING TO LEAD TO ANY MAJOR SLOWDOWN IN ECONOMIC ACTIVITY.>>OKAY BRIAN. A STRONG — ECONOMY PROBABLY A STRONG MARKET.

11 comments

  1. The Dems are "Cutting off the nose to spite the face" . This is an expression to describe a needlessly self-destructive over-reaction to a problem: "Don't cut off your nose to spite your face" is a warning against acting out of pique, or against pursuing revenge in a way that would damage oneself more than the object of one's anger.

  2. President Trump's first order of business in 2019, shut down the federal government, send half of the federal workers home, and pay the other half with food handouts. . . Chinese President Xi Jinping's first order in 2019 was telling the military and people of China to prepare for war, and apparently, not a trade war. . . . Take a peek behind the border wall made of steel. . . Pull back the Iron and the Bamboo Curtain. . . Learn more, Visit PopZero News Network Youtube channel.

  3. lol Really! WTF is this guy saying. These people are getting paid eventually. They just arent part of the economy anymore. 800,000 people not spending. How many jobs are they effecting by staying home? 2 maybe 3 other worker's each. 800,000 people is a city. Its billions lost.

  4. I don’t agree with this at least the first quarter. IRS is suppose to pay out billions of dollars in tax refunds. I know in my small town car sales go up during tax refunds and other goods too

  5. Trump is making the US the 3rd global economy so Russia and China can take over. That's what the FBI investigation is for. He's making America great again by weakening us at every border and against having TSA at half staff.

  6. These people are so ridiculously short sighted! Products are only as valuable as what people are willing to pay for them. People who have just had to pay multiple late charges after decimating their savings WILL NOT be buying stocks, even when they are repaid. Farmers went from selling 4.7 mil metric tons of soybeans to zero and are now not getting their bail out check because of the shutdown. This means that grocers, hair stylists, karate coaches, etc. will be feeling the reduction in spending. If it lasts into tax season, the ripples might be felt for years, because an estimated $1.4 billion is poured back into the economy from tax refunds in February and March.

    Please, Republicans, if you insist on running government like a business it MUST NOT be like one of Trump's!

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