Rise With Profit: US Economic Data, Accenture Raises Guidance, Bank Of England Retains Rates | Podcast
NDTV Profit Podcast: From US government's funding woes to Accenture's revenue guidance revision, here's everything you need to know to start your day on the right note.
Good morning and happy Friday to you!
This is the daily morning update from NDTV Profit. Over the next few minutes we’ll bring you up to speed with everything you need to know to start your day on the right note.
In the top global news—the US economy grew faster than was previously thought in the third quarter. This was driven by consumer spending that has remained strong in recent months.
GDP increased at an upwardly revised 3.1% annualised rate, according to the Commerce Department's Bureau of Economic Analysis. The economy was previously reported to have expanded at a 2.8% pace last quarter. The revision reflected upgrades to consumer spending and export growth, which offset a downward revision to private inventory investment and upward revision to imports.
Meanwhile, applications for US unemployment benefits fell last week after spiking earlier this month, continuing a streak of volatility that often occurs during the holiday season. Initial claims decreased by 22,000 to 220,000 in the week ended Dec. 14. The median forecast in a Bloomberg survey of economists called for 230,000 applications.
All of this is important to track in the context of the latest moves and commentary by the Federal Reserve. The US central bank cut rates as expected this week, but guided for a slower pace of cuts, which set off a bout of selling in risk assets globally, including here in India.
Speaking of central bank action—the Bank of England, in a dovish move, signalled it will keep easing gradually in 2025 as a growing minority of officials set aside evidence of lingering inflation to back an immediate cut in borrowing costs. The Monetary Policy Committee voted 6-3 in favour of keeping its benchmark interest rate unchanged at 4.75%.
With Donald Trump poised to re-enter the White House in January, the UK central bank specified geopolitics and trade among the risks it sees, along with the impact of the Labour government’s recent budget. Officials seem to now be expecting a stagflation—where inflation remains above target with little to no economic growth.
US Government Funding Woes
In other news, the US government could be heading towards a shutdown yet again. Government funding is set to expire at midnight tonight. That’s after a spending bill backed by Donald Trump failed in the US House of Representatives yesterday, as dozens of Republicans defied the president-elect. The package failed by a vote of 174-235, just hours after it was quickly put together by Republican leaders following Trump's orders. Thirty-eight Republicans joined 197 Democrats in opposing the bill. A prior bipartisan deal fell through after Trump and the world's richest person, Elon Musk, came out against it on Wednesday.
If lawmakers fail to extend that deadline, the US government will begin a partial shutdown that would interrupt funding for everything from border enforcement to national parks and cut off paychecks for more than 2 million federal workers.
Accenture's Raises Revenue Guidance
In corporate news, Accenture revised its outlook for the current financial year, as it sees full-year revenue growth in the range of 4% to 7% in local currency, up from the previous 3-6% forecast. The outlook has been raised as the Nasdaq-listed company now expects a lower adverse impact from foreign exchange on its fiscal 2025 results—now at 0.5% compared with 1.5% earlier.
Finally in international markets, US stocks ended mostly lower, but with narrow cuts. The Dow closed flat, while the S&P 500 and the Nasdaq dropped by about 0.1%. In the Asia Pacific region, two of the three early risers have started in the red. The Nikkei 225 was the outlier, gaining about 0.3%, last I checked.
