(As of 7:15 am PST)
We’re off to a rocky start on
Wall Street this morning as investors took in mostly disappointing data on the
US economy. Most notably, a report on first quarter GDP showed the US economy
contracted in the first quarter for the second consecutive year. Gross domestic
product shrank by -0.7% in the quarter. A growing trade deficit due to a rise in imports cut into growth in the first quarter while consumer spending also slowed below original forecasts. Economists were forecasting a -1.0%
GDP decline in Q1. In
other economic news, a report on the Chicago manufacturing PMI fell sharply. The
disappointing data this morning has investors confused on what this means for a
Fed rate hike. The “good news bad news” trade seems tired, with markets not
reacting to negative or positive data as they once did. We seem to be stuck in
a range trade for now, until some more consistent data comes out and a clear
direction from the Fed on the plan to raise interest rates unfolds. Across the
pond today, European stocks are heading towards a mixed close while Asian
markets wrapped up the week near the unchanged line. Gold and oil are pushing
higher while the US dollar is flat. Despite a volatile week for US markets, the
month of May was generally positive for stocks with the S&P500 up nearly
1.7% while the Nasdaq is looking at monthly gains of 3%.
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