Investors continued to drive stock prices higher and bond prices lower last week. The pricing action in financial markets reflects the expectation corporate profits will be very strong in 2018, while the Fed continues to move managed interest rates higher. The anticipated Fed action will be possible because the economy will be much stronger this year than any year in the past eight. The Advance report for fourth quarter Real GDP is due on Friday, with the consensus forecast calling for growth of 2.9%. This would be in comparison to the 3.0% of the second quarter and 3.2% of the third.

This growth is well above the average annual growth of 2.1% in the last eight years. Economic growth is expected to be led by a surge in consumer…

ProBank Austin Advisor – January 22, 2018