Where’s the U.S. economy headed? “The picture is very confusing,” said Bob Doll, a senior portfolio manager and chief equity strategist with Nuveen Asset Management in a recent interview.
While consumer sales are growing, there are headwinds like trade and inventory issues, Doll explained during the interview, broadcast on Asset TV this week.
“Real GDP [growth in the third quarter] could be 2% or a little less, after 3.9% in Q2,” he stated. As for the average going forward, “It should be somewhere in the twos, hopefully in the higher twos.”
GDP growth rates in some emerging markets look “more mixed,” he said in his weekly investment commentary, published Monday. “China’s economy is clearly slowing, and we think it is decelerating to approximately 5%.”
This divergence between growth in the U.S. and weakening in many other parts of the world is affecting U.S. corporate earnings.
“In the third quarter, results are mixed, and we may see a -2% earnings change overall,” Doll said during in the interview. “The demarcation line speaks to the decoupling of the global economy.”
(A big factor in the drop in average earnings, the Nuveen expert says, is the significant decline in energy earnings. “Reported earnings may be down around 2% to 3%, but would be up 4% to 5% excluding energy,” he explained in a written commentary on the markets.)