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Before the bell: The economy is booming, the labor market is strong, profits exceed expectations. What's next?

Although concerns about an impending recession have diminished, the economy should continue to struggle to continue its recent gains. That does not mean that it is impossible.

S & P 500 ( DVS ) and Nasdaq Composite [ COMP ]) have seen some in recent weeks Records set. And market watchers believe that we will see more. The Dow [ DJIEW ) could reach a new high during the year.

Economic growth in this quarter is not expected to fall by a jot. Wall Street, by and large, believes that the economy has more to offer. The consensus estimate, according to the Atlanta Fed, is 1

.7% between April and July.

In the first three months of the year, the economy expanded due to growing inventories and exports – more volatile than, for example, consumers spend. If these factors subside in the second quarter, this could weigh on the economy.

"Q2 GDP could be disappointing with inventories weighing on GDP over the next two quarters," said Omar Aguilar, CIO for equities and multi-asset strategies at Charles Schwab Investment Management.

However, consumer sentiment could come to the rescue and outweigh the negative effects of stockpiles. US consumers were not very wasteful in the first quarter, but spending could catch up this quarter.

The Federal Reserve does not seem to see red flags. Fed Chairman Jerome Powell has committed to a "patient" attitude to policy changes, despite sluggish inflation and the call of President Donald Trump, to cut interest rates in order to boost economic growth.

"The stock rally at the beginning of the year, now economic data will be the catalyst for it to continue," said Kate Warne, investment strategist at Edward Jones.

The background of supportive economic fundamentals provides for a better investment climate than the last The time shares reached record highs in autumn 2018. This should be reason enough that many investors are waiting on the sidelines to get involved and spend their money.

"By the end of the year it will have been one of two things: Either the market was wrong or the Fed was wrong: If inflation continues with less economic growth, the Fed will need to cut its key interest rates, but if everything is right, that Market to its expectations, "said Aguilar.

The analysts will keep an eye on margins as the year progresses. With rising wages, companies have not passed these costs on to their consumers. So far, they have been able to reduce costs elsewhere to compensate. If that is no longer possible, the margins are compressed.

2. ECB and Growth: The European Central Bank will publish its monetary policy update on Thursday, and all eyes will be on the assessment of the Eurozone economy. In its latest update, the central bank said the Eurozone's growth risk was down. Since then, the GDP of the currency block in the first quarter was better than expected at 1.2% compared to the previous year.

Compared to the US, Europe's economy is much more dependent on exports. The upturn in business activity in China, which also turned out better than expected in the first quarter, should therefore be good. Let's see what ECB President Mario Draghi will say.

3. Global Synchronized Acceleration: Long and short is that economic data is improving across the board. The fears of a global synchronized slowdown have been stimulated from everywhere. China continues to strongly support its economy. The ECB once again supported its longer-term refinancing operation, which was intended to support local financial institutions during the European debt crisis. And investors on Wall Street praised the Fed as it pulled out of the gas as it decided to keep its policy rates steady this year.

"I think global sync pulses will lead to global synchronized acceleration," said Steven Chiavarone, portfolio manager and equity strategist for Federated Investors.

4th upcoming week:

Monday – Son's Investment Conference; Occidental Petroleum [ OXY ) Merit
Tuesday – US JOLTS; Anheuser-Busch InBev ( BUD ) Income; Papa Johns [ PZZA ) Revenue
Wednesday – SALT Conference; GE [194559003] [ GE ) Annual Meeting
Thursday – SALT conference, China's consumer price inflation, US jobless claims and March trade data, ECB monetary policy update; Ford ( F ) Annual Meeting
Friday – US Consumer Price Inflation, British GDP; Marriott ( MAR ) Result

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