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GDP rises above estimates, but signs of a slowdown remain – Goldman Sachs/JPMorgan CEOs still project US recession – Europe natural gas prices dip below zero – Zuckerberg defends Metaverse plans – New SEC rule on bonuses
The US gross domestic product (GDP) grew at an annualized rate of 2.6 percent between July and September, according to data released Thursday by the Commerce Department.
The rise was higher than economists’ estimates of 2.3 percent in the third quarter. The uptick occurred following the declines of 1.6 percent in the second quarter and 0.6 percent in the third quarter of 2022, the Bureau of Economic Analysis reported Thursday.
However, despite the growth numbers, there were warning signs within the report of a slowdown, The Hill reported.
“Much of the growth in Q3 GDP was driven by an increase in exports, reflecting the global reopening that occurred this past summer,” wrote John Leer, chief economist at Morning Consult, in an analysis on Thursday. “But weak global demand combined with a relatively strong U.S. dollar are likely to significantly limit export growth.”
Goldman Sachs CEO David Solomon and JPMorgan CEO Jamie Dimon are both expecting a U.S. recession, citing a tight labor market that keeps the Federal Reserve on an aggressive monetary policy tightening trajectory, CNBC reported.
Solomon projects the Fed will continue raising interest rates until they reach 4.5%-4.75% before pausing.
“I think generally when you find yourself in an economic scenario like this where inflation is embedded, it is very hard to get out of it without a real economic slowdown,” Solomon said, speaking at the Future Initiative Investment conference in Riyadh, Saudi Arabia on Tuesday.
Currently, Europe has such a large supply of natural gas that storage facilities are close to full, and tankers carrying liquefied natural gas (LNG) are lining up at ports, unable to unload their cargoes, which sent prices tumbling.
Spot prices briefly went negative earlier this week due to an “oversupplied grid,” CNN reported.
Two days after an investment banker/shareholder in Meta issued a scathing open letter warning the company and Mark Zuckerberg that investors are losing faith in the company’s metaverse plan, calling the over $1 billion in investments “terrifying,” the company’s founder defended the move the Daily Mail reported. The company has lost $650 billion in market valuation this year.
“People investing with us will be rewarded,” Zuckerberg said.
“I think it’s [metaverse] going to be fundamentally important for the future,” Zuckerberg continued. “I get that a lot of people might disagree with this investment.”
“But I think it’s an important thing, and I think it would be a mistake not to invest in this for the future,” Zuckerberg added.
The Securities and Exchange Commission voted Wednesday for the adoption of a new rule requiring public companies to take back executive compensation when their financial statements contain errors.
Known as a “clawback” requirement, the rule is intended to hold corporate executives financially accountable for any errors in reporting, whether they are the result of willful fraud or simple accounting errors, CNN reported.
The rule was mandated by Congress as part of the 2010 Dodd-Frank Act, and the initiative was revived by the SEC last year as part of a larger crackdown on corporate misconduct.
