Chew on that, Powell: GDP, durable goods, jobless claims
Major U.S. stock indexes green, Dow up 0.8%, Nasdaq up just 0.1%
Industrials lead sector gainers; Comm svcs biggest loser
Euro STOXX 600 index falls ~0.7%
Dollar edges down; gold down >1%; bitcoin off ~2%; oil up
U.S. 10-Year Treasury yield falls to ~4.23%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
CHEW ON THAT, POWELL: GDP, DURABLE GOODS, JOBLESS CLAIMS
Market participants were treated to a triple play of economic data, which combined to show the U.S. economy is robust, and consumers and corporations alike continue to spend.
That's good news, as it strengthens the narrative that the United States will avoid recession even if it turns out the Fed waited too long to start easing its restrictive policy rate.
The Commerce Department took its first swing at second-quarter GDP USGDPA=ECI, which showed the U.S. economy grew by 2.8% on a quarterly annualized basis.
That is exactly double the first-quarter pace and 80 basis points faster than analysts expected.
On a line-item basis, an 11.6% jump in equipment investment was an eye-catcher. The 4.5% increase in intellectual property/software - which would include AI investment - was also a head-turner.
"The trajectory remains robust for capital spending related to artificial intelligence. We see this as an ongoing opportunity for investors," says Jeffrey Roach, chief economist at LPL Financial.
"Growth rebounded from the weak numbers in Q1 but today's release does not change expectations that the Fed will cut rates at least two times this year as inflation decelerates."
Consumer spending, the tent pole of the U.S. economy, responsible for about 70% of the total, also accelerated, growing by 2.5% and contributing 1.6 percentage points to the top line.
"Consumer spending remains robust, supported by the remarkable resilience of the US labour market, which has continued to add jobs at a decent pace, and the normalisation in rates of inflation, which are gradually closing in on the Federal Reserve’s 2% target," Matthew Ryan, head of market strategy at Ebury.
This graphic shows consumers ramped up their spending on durable and non-durable goods.
Speaking of the devil, new orders for long-lasting, U.S.-made goods USDGN=ECI unexpectedly plunged by 6.6% last month in a rude defiance of the 0.3% growth expected by consensus.
Drilling down into the tireless Commerce Department's report - which includes items ranging from waffle irons to attack drones - a whopping 127.2% plunge in commercial aircraft/parts helped sink the headline, while a 6.1% increase in defense capital goods somewhat mitigated matters.
Excluding defense, new orders plunged an even 7.0%. And excluding transportation, they actually rose 0.5%.
On the bright side, there was a 1.0% increase in so-called core capital goods, which excludes aircraft and defense and is considered a barometer of U.S. corporate spending intentions.
That's a nice reversal from May's 0.9% drop and much more robust than the paltry 0.2% gain economists projected.
"Volatile transportation orders were to blame for the poor headline figure," writes Bernard Yaros, U.S. lead economist at Oxford Economics.
"Core orders, which are a better gauge of future capital spending by companies, performed better than even our above-consensus forecast, reinforcing our sanguine outlook for equipment spending in H2 2024.
And finally, the number of U.S. workers to queue up for jobless benefits USJOB=ECI dipped by 4.1% last week to 235,000, per the Labor Department.
But the overall trend, as expressed by the 4-week moving average of initial jobless claims, is sideways.
Citing variables including the effects of Hurricane Beryl, auto plant retooling, among other things, Oliver Allen, senior U.S. economist at Pantheon Macroeconomics had this to say:
"Looking through the fog, we suspect that the underlying uptrend in claims that became clear a few months ago is ongoing, given that high rates and slowing consumer demand seem to be prompting a bigger number of layoffs."
Ongoing claims USJOBN=ECI, reported on a one-week lag, inched 0.5% lower to 1.851 million, though still well north of the 1.7 million pre-pandemic "normal."
(Stephen Culp)
*****
FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
NASDAQ DOWN, S&P 500 DIPS, DOW GAINS IN EARLY TRADE - CLICK HERE
S&P 500 INDEX: AFTER SHARP SLIDE, SEEKING TO STABILIZE - CLICK HERE
WHAT'S UP WITH THE YEN? - CLICK HERE
WHY UBS LIKES BANKS - CLICK HERE
STOXX 600 DROPS TO 12-WEEK LOW AS EARNINGS FAIL TO IMPRESS - CLICK HERE
GLOBAL EQUITY SLUMP SET TO GATHER MOMENTUM IN EUROPE - CLICK HERE
STOCK ROUT SPREADS BEYOND TECH - CLICK HERE
Nasdaq, S&P 500 down again https://tmsnrt.rs/3LGooE0
GDP contributors https://reut.rs/4de8VXE
GDP consumer contribution https://reut.rs/3SlZBZI
Durable goods https://reut.rs/4fhrAUk
Core capital goods https://reut.rs/4d7yAkO
Jobless claims https://reut.rs/4fgxk0x
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
