This morning's release from the Bureau of Economic Analysis (BEA) will be the third, and final, update of 2Q GDP. The update last month indicated 2Q real GDP rose at an annualized 3.0% pace, up from a shaky 1.4% growth rate in 1Q24. The all-important consumer economy rebounded to drive 2Q GDP. Consumer spending, designated as Personal Consumption Expenditures (PCE) in the GDP report, contributed 1.95 percentage points of the 3.0% growth in 2Q. Private domestic investment added 1.31 points, growing 7.5%, led by a 10.8% surge in equipment, which shows no hint of recession. We don't expect a major revision to GDP this morning. Between 1996 and 2022, the average absolute revision to the quarterly percentage change in real GDP was just 30 basis points, according to the BEA. PCE grew 2.9%, boosted by the huge services component, which was up a solid 2.9% on top of 3.3% growth in 1Q24. Consumer spending on goods rose 3.0%. Within goods, nondurables were up 2.0% and durables were up an impressive 4.9%. Residential fixed investment fell 2.0% after rising 16.0% in 1Q as mortgage rates moved above 7% in May. On October 30, the BEA will release its advance estimate for 3Q GDP. We expect 3Q24 growth of 1.6%. The September 18 GDPNow forecast for 3Q24 from the Atlanta Fed is 2.9%, with an estimate for 3.7% growth in PCE. Intellectual property and equipment could again make strong contributions to quarterly growth according to the Nowcast. Residential fixed investment is likely to be a bigger drag on 3Q GDP than it was in 2Q. We expect GDP growth of 1.7% in 4Q24. Our full year 2024 estimate is 1.9%. Our 2025 estimate is 2.0%. Federal Reserve board members and bank presidents expect GDP to grow 2.0% in 2024, 2.0% in 2025, 2.0% in 2026, 2.0% in 2027, and 1.8% in the "longer run."

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Lowe's is the second-largest home improvement retailer in the world, operating more than 1,700 stores in the United States, after the 2023 divestiture of its Canadian locations (RONA, Lowe’s Canada, Réno-Dépôt, and Dick’s Lumber). The firm’s stores offer products and services for home decorating, maintenance, repair, and remodeling, with maintenance and repair accounting for two thirds of products sold. Lowe's targets retail do-it-yourself (around 75% of sales) and do-it-for-me customers as well as commercial and professional business clients (around 25% of sales). We estimate Lowe's captures a high-single-digit share of the domestic home improvement market, based on US Census data and management’s market size estimates.

Lowe's is the world's second-largest home improvement retailer, with sales of $86 billion in FY24. Based in Mooresville, North Carolina, the company operated about 1,750 home improvement and hardware stores in the U.S. at the end of FY24. Retail selling space was 195 million square feet. Home Decor, which includes appliances and paint, was the biggest merchandise division at 37% of FY24 sales. Building Products, including lumber, was 31%; Hardlines, including tools, seasonal, and lawn & garden, was 29%; Other categories represented just under 3% of sales. About 75% of sales are to individuals and 25% are to maintenance, repair, operations and construction professionals. The states with more than 100 stores at the end of FY24 were Texas, Florida, North Carolina and California. Online sales were 5% of the company's total in FY20 and rose to about 7% at the end of FY21 and 11% in 4Q23. The company's fiscal year ends on the Friday closest to the end of January. Based on the fiscal calendar, FY17 had a 53rd week, which happens about every five years. The FY23 was also 53-week fiscal year. FY25 will end on January 31, 2025.