January 27, 2012
Yesterday’s U.S. durable goods release may be pointing to a rebound in business investment. “We’re poised for a bounce-back in the first quarter in terms of business spending,” said Scott Anderson, a senior economist at Wells Fargo Securities LLC in Minneapolis.“Confidence is up, and there are some signs that the labor market is improving. We’re still facing issues with housing.”
It was the second day in a row for commodities and treasuries to rise, after the Fed extended their pledge to keep their benchmark rate interest rate low through late 2014 and said it was considering another round of quantitative easing (QE). U.S. stocks retreated from a 6-month high, with the S&P 500 closing down -0.57% on the day, led down by the Telecommunications and Oil & Gas sectors. The U.S. 10yr Treasury fell 6bps to 1.931% in late New York trading.
European stocks soared higher, with the Euro Stoxx 50 index up +1.62%, with almost all of the euro area indices broadly higher.
GDP climbed at a 2.8% annual pace, following a 1.8% gain in the prior quarter, showing the U.S. economy expanded less than forecast, as consumers curbed spending and government agencies cut back. The median forecast of 79 economists in a Bloomberg News surveyed called for a 3% increase. U.S. stocks lost around -0.4% as of 9:30am EST, sending the S&P into a loss on the week.
Today’s Economic Data Lineup (EST)
8:30am, GDP (Q/q) (Annualized), est. 3.0% from 1.8%
8:30am, GDP Price Index, 4Q A, est. 1.9% from 2.6%
8:30am, Core PCE (Q/q), 4Q A, est. 0.9% from 2.1%
8:30am, Personal Consump, 4Q A, est. 2.4% from 1.7%
9:55am, U.Mich, Jan. F, est. 74 from 74
11:00am, Fed to sell $8b-$8.75b notes in 3/15/2014 to 1/15/2015 range
“Winners never quit, and quitters never win.”
T 312 634 8902
F 312 930 3187
C 312 618 8339