The last week of the Q2 earnings season will still deliver some large-cap earnings reports, but the focus of the market will be on the real GDP growth rate in Q1.
Besides getting the Q1 GDP growth rate later in the week, investors will be eager to see how the consumer spending fared in May as it makes up a large portion of the GDP and can signal how the economy might perform in the coming quarters.
The historically low unemployment rate along with plenty of jobs kept employers on their toes in May, and such an unusually strong labor market could easily beef up consumer confidence and spending. While that’s great news for Q2 growth rate, it can also push wages higher and cause major concern for investors. After all, the Fed is more than willing to go out of their way to hike rates and nobody wants them to get any idea that the economy is overheating.
To sum up, there is plenty of economic data to keep us busy, but dividend investors should probably start thinking about reorganizing their portfolio this week as bond rates have become way too lucrative to keep holding onto those low-yielding stocks with not so much upside potential.
Check out last week’s Market Glance here in which investors were worried about the severe shortage of labor in the country and the historic meeting between President Trump and North Korean leader Kim Jong-un.
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