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Final Estimate of US First-Quarter GDP Declines
European markets rallied as Mario Draghi, President of the ECB,
said that the ECB has no plans to alter its monetary policy. The
(INDEXDB:DAX) finished the day up 1.66%. Chinese money market rates
began to normalize again as the Chinese government made efforts to
control the liquidity squeeze.
The third estimate of US first-quarter GDP was unexpectedly revised downward from 2.4% to 1.8% due to declines in personal consumption and exports. Crude inventories rose by 18,000 barrels last week, according to the EIA. Crude oil was $0.16 higher at the close of floor trading.
Despite the negative macroeconomic news, US indices rallied throughout the day. The S&P 500 (INDEXSP:.INX) finished up 1.1%. All subsectors of the S&P were positive today with health care, utilities, consumer discretionary, and industrials in the lead with gains of more than 1.25%. Regional financials also broke above recent highs as rising interest rates show the greatest benefit to these banks. Larger investment banks like Goldman Sachs Group Inc ( GS ) and Morgan Stanley ( MS ) lagged. The 10-year yield dropped 5 bps to 2.535%, despite the very weak Treasury auction of $35 billion in 5-year notes. Gold took another big hit, plunging 4% on the day.
General Mills, Inc. ( GIS ) reported earnings this morning before market open. EPS came in on par with expectations of $0.53. The $4.4 billion in revenue topped the expected $4.3 billion. Shares dropped 0.5% on the news.
Tomorrow's Financial Outlook
Great Britain's GDP will be released at 4:30 a.m. EDT tomorrow morning. EMU economic sentiment will be released at 5:00 a.m. EDT.
US jobless claims will be reported at 8:30 a.m. EDT. Initial weekly claims are expected to come in at 345K. US personal income and outlays will be released tomorrow at 8:30 a.m. EDT. Personal income is expected to see month-over-month growth of 0.2%. Consumer spending is expected to rise 0.4% over the same time period. Pending home sales will be released at 10:00 a.m. EDT. Sales are expected to have grown 1.0% over the past month.
ConAgra Foods, Inc. ( CAG ), KB Home ( KBH ) and Nike, Inc. (NKE) will be reporting earnings tomorrow.
Japanese CPI and household spending will be released at 7:30 p.m. EDT.