RETAIL SALES DING Q2 GDP EXPECTATIONS….
Still no recession, but yesterday’s retail sales disappointment led to broad downgrades for Q2 GDP. The WSJ’s Real Time Economics provided some details:
J.P. Morgan Chase - now expects U.S. gross domestic product to grow at a 2.0% annual growth rate, down from its previous 2.5% projection.
BofA Merrill Lynch – Today’s report slices 0.5 percentage point from second quarter GDP growth, leaving us tracking 1.9%.”
Royal Bank of Scotland - lowered its forecast for second-quarter GDP to 1.9% growth from 2.2%
Barclays Capital - “The retail ex-autos component, relevant for GDP tracking, rose 0.1%, in line with our forecast, although a one-tenth downward revision to March (to 0.0%) was sufficient to push our 2Q GDP tracking estimate down by one-tenth, to 1.8%.”
Credit Suisse also highlighted a downward revision to April’s numbers, and moved its tracking estimate for 2Q GDP to 2.2% from 2.5%.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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5 Comments
Let me see if I understand the rules to this “Recovery” game.
Wall st. writes its estimate of growth at the beginning of the year and sells stocks to its clients with estimates of 3% GDP growth. By the time summer comes with the expiration of Bens support looming Wall St. the week before the fed must decide to add more fairy dust all of Wall st. decides to lower GDP estimates to make sure who ever is listening knows the economy is slowing ….UNLESS that is someone from Constitution Ave. could spare some more easy money.
And the Bulls have the balls to lecture the Bears about how extreme their views are?
Could the bulls add up all the monetary programs( LTRO, QE Etc.)that has been used to achieve this revised 2% GDP number?
Now can a Bull tell me how it is that when a bear and the 10 yr. say the SPX is pointing to a 750 print how that is extreme.
The only thing extreme is not recognizing that you’d be out of money had the markets been allowed to operate properly.
Once in a while I like to give my opinion. So I don’t feel so dirty when I turn a blind eye to what ever the FED decides to do.
My job is to make money but I’d sure like to see the dumb bulls get what they deserve. … No regulation! Just as Dimon would want it. That way . When they lose money.. None of it is backed by the US govt.
It’s backed by the full faith and credit of whats behind the risk. Is it time we let the bulls see how they do with out the monetary training wheels? I vote yes. Give them all they want… It would be the best thing for everyone.
Estimate adjustments lowered before the Fed meeting . Classical Wall st. Flop.
It’s great watching bears wallow in their own misery.
Here’s a good news article… manufacturing jobs http://www.ibtimes.com/articles/348058/20120602/manufacturing-renaissance-shale-gas-cat-f.htm?cid=6
Great article hangemhi, here’s a link to the BCG report the article references – https://www.bcgperspectives.com/content/articles/manufacturing_supply_chain_management_us_manufacturing_nears_the_tipping_point/
Cullen, thanks for posting these reduced GDP forecasts. Barclays gave the most pessimistic one of the four, calling for GDP growth of 1.8% in 2nd Qtr. Sometimes the direction of change is more important than the number, and all five agree that the US economy is decelerating.
So today’s equity rally after the bad job claims report is due to the universal call going out to Uncle Ben: We need your help really badly!!