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Deep Value Dividend Growth Index Week 27 Update: Going On A Shopping Spree While REITs and Pipelines Are Burning

Posted On May 30, 2017 10:31 pm
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Weekly Economic Data Review

In terms of economic news things were mixed. On one hand the Q1 GDP growth estimate was upgraded from 0.7% to 1.2%, which is certainly good and inline with other hard data.

In addition the Philly Fed index continues improving, and corporate earnings are growing near 14%, though mainly due to higher oil prices and energy results.

More importantly for Main Street America is that the 4 week rolling average for new jobless claims continues to beat expectations, decline, and indicate the strongest labor market in over a decade.

On the negative side, new home sales fell 11% last month, while exisiting home sales declined by 2.3%. That’s likely to do with several factors, including home prices approaching inflation adjusted records, and much tighter lending standards for mortgages, including a 20% downpayment that many people are having a hard time saving up, especially with home prices growing at about three times the rate of inflation (5.7% YoY).

Durable goods orders also declined 0.7%, the first fall in five months, indicating that business capital investment may not be as strong as strong business confidence might make us hope for.

Meanwhile the projected growth of the US economy remains slightly positive:

New York Fed GDP NowCast: 2.2% projected Q2 GDP growth

Atlanta Fed GDPNow: 3.8% projected Q2 GDP growth

While both reports are merely based on models running on real time economic data, I think that it’s reasonable to assume that actual GDP growth will come in somewhere between these two estimates. If we truly can achieve 3% (midpoint estimate) growth that would be very good news indeed.

About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, Investorplace.com, and TheStreet.com. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 20 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 4% to 5% yield 2. Offers 9% to 10% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

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