US Growth - Economy, GDP & Earnings
10/19/2026Blog Categories
“The Fed has raised rates and the market expects there will be at least 2 or 3 more rate hikes over the course of the next year. This has resulted in a significant increase in market rates of late. Fortunately, the economy is in pretty good shape, thanks to strong corporate profits and a booming AI industry. …[There is] good evidence that the recent rise in interest rates is not due to higher inflation expectations which have been flat for the past four years or so. What's changed is that real yields have been rising. Why? Most likely because the market is sensing that economic growth is picking up. Stronger growth supports higher rates, and investors demand higher rates to compensate for more attractive returns on productive assets.”
[The long-term trend for annual GDP growth was 3.1% but since the great financial crisis, the trend growth has been lower at 2.3% annually. As of October 15th, third quarter 2026 GDPNow from the Atlanta Federal Reserve estimate growth at 3.6%.] …“Note that in the past several years real GDP growth has been slowly trending higher vs the trend in place from 2009 through 2023. This partially justifies the recent rise in real yields.” (Thinking about higher interest rates and the demand for money dated 10/08/2026 by Scott Grannis, Chief Economist at Western Asset Management from 1979-2007)
“The current earnings growth rate for the S&P 500 for the third quarter is 29.6%, which would mark the 3rd consecutive quarter of year-over-year earnings growth above 25% for the index. Given that most S&P 500 companies report actual earnings above estimates, what is the likelihood the index will report earnings growth of 29.6% for the quarter? Based on the average improvement in the earnings growth rate during the earnings season, the index will likely report earnings growth above 35% for Q3.” (S&P 500 Likely to Report Earnings Growth Above 35% for Q3 dated 10/09/2026 by John Butters Vice President and Senior Earnings Analyst with FactSet)
[The long-term trend for annual GDP growth was 3.1% but since the great financial crisis, the trend growth has been lower at 2.3% annually. As of October 15th, third quarter 2026 GDPNow from the Atlanta Federal Reserve estimate growth at 3.6%.] …“Note that in the past several years real GDP growth has been slowly trending higher vs the trend in place from 2009 through 2023. This partially justifies the recent rise in real yields.” (Thinking about higher interest rates and the demand for money dated 10/08/2026 by Scott Grannis, Chief Economist at Western Asset Management from 1979-2007)
“The current earnings growth rate for the S&P 500 for the third quarter is 29.6%, which would mark the 3rd consecutive quarter of year-over-year earnings growth above 25% for the index. Given that most S&P 500 companies report actual earnings above estimates, what is the likelihood the index will report earnings growth of 29.6% for the quarter? Based on the average improvement in the earnings growth rate during the earnings season, the index will likely report earnings growth above 35% for Q3.” (S&P 500 Likely to Report Earnings Growth Above 35% for Q3 dated 10/09/2026 by John Butters Vice President and Senior Earnings Analyst with FactSet)