Futures vs FV: SP +0.14; DJ +31.38; NASDAQ -12.05
Shocking. Stunning. Q3 GDP growth at 2.9%. How on EARTH did it not top 3% with an election just 11 days away?
Q3 GDP 1st read: 2.9% vs 2.5% expected vs 1.4% Q2
Consumption: 2.1% vs 2.6% exp vs 4.3% Q2
The breakdown:
Inventories: Added 0.6% to GDP bottom line
Exports: +10% as net trade added 0.8% to the bottom line GDP
Fixed Investment: -0.1% to GDP bottom line, now showing 4 straight quarters of declining investment.
Consumer spending main additions: Higher rents, higher utilities, and higher health care. Yes, the things you have to have to survive are why GDP is rising. No news there.
M&A: GE said to be buying BHI. But no, GE says it is just a partnership.
Earnings beats: SYK, HSY, AMGN
Earnings misses: AMZN (BL), EXPE (BL), MCK, UBS (BL), NWL (TL), XRX (TL)
OTHER MARKETS
Bonds: 1.854% vs 1.850%
EUR/USD: 1.0920 vs 1.0895
USD/JPY: 105.216 vs 105.305
Oil: 49..16 -0.56. Oil continued lower after GDP
Gold: 1272.40, +2.90. Gold reversed from losses post GDP
Futures have steadily recovered from a weak pre-market session, trading at the highs for the past 2+ hours. Yes, GDP had no real impact on the futures.
Earnings are cited as a real drag this session with a lot of misses and not just the top line as it often is.
Good recovery off the lows, the data is not bad, but the people we are talking to at trading desks are not buying it. A bit of cynicism out there. Bond yields have not budged; that tells the story as to how the market views the data.
RUTX, SP400 broke support and watching how they recover. Watching how NASDAQ holds its TL. Expecting it to do so. Today's moves may be deceptive, but before today there were support breaks and tests of important trendlines, e.g. NASDAQ. That is what we have to keep in mind on this Friday.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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