Here's what a strong GDP means for stocks

Economic Growth and Market Sentiment - The GDP growth rate was reported at 4.3%, the highest since Q3 of 2023, indicating stronger-than-expected economic performance [1][9] - Personal consumption increased by 3.5%, and savings rates improved to 4.2%, suggesting robust consumer activity [10][11] - Productivity growth is at levels not seen in decades, contributing positively to economic growth and inflation management [11] Interest Rates and Market Implications - Long-term interest rates are expected to remain elevated, with Deutsche Bank indicating a significant increase in yields [1][4] - The US 10-year Treasury yield has not been below 3.5% since June 2023, and the S&P has risen over 60% during this period, showing that markets can thrive even with higher rates [14] - Global trends show rising interest rates, with Japan raising rates twice this year, reflecting a broader shift in monetary policy [4][5][6] Earnings Growth Expectations - Earnings growth is anticipated to be in the mid-teens for the upcoming year, driven by consumer spending and productivity improvements [12] - The long-term average earnings growth is around 7.7%, but current estimates may need to be revised higher due to strong economic momentum [13] Market Strategy and Positioning - Investors are advised to consider repositioning their portfolios in light of potential market volatility and elevated interest rates [15][20] - There is a suggestion to take some risk off the table, especially for those heavily invested in growth equities, to mitigate potential short-term market fluctuations [20]