The flood of U.S. economic data and corporate earnings due this week has started coming in, and things don't look good. Tuesday's jarring stream of poor trade, jobs and household confidence readouts is weighing on expectations for today's first official take on U.S. first quarter GDP.
U.S. economic surprise indexes, which had briefly flipped positive for the first time in two months this week, have since relapsed and turned negative once again.
Perhaps the biggest red flag was the ballooning U.S. goods trade deficit in March, driven by a surge of imports seeking to beat the April tariff hikes. Net exports are an input for gross domestic product calculations, so this deficit bodes ill for today's Q1 GDP print.
GDP trackers, like the closely watched Atlanta Fed 'GDPNow' model, are now firmly in the red.
Even though that GDP projection contrasts with consensus forecasts for a modest 0.3% expansion in the first quarter, Wall Street banks have scrambled to downgrade their calls this week. Goldman Sachs now sees GDP contracting at a 0.8% annualized rate, Deutsche Bank expects a 0.9% drop and JPMorgan forecasts shrinkage at a 1.75% pace.
News that job openings last month dropped to their lowest in six month added to the gloomy picture in a big week for labor market updates. Meanwhile, consumer confidence readings for April plunged to their lowest in five years.
The darkening global demand outlook, was hit further by renewed signs of a downturn in China's factories this month. This saw crude oil prices fall back below $60 per barrel for the first time in almost three weeks.
Cracks in the jobs market may start to shift the Fed dial, and March inflation readings later today are likely to be relatively benign. But few if any forecasters expect the Fed to ease at next week's policy meeting. Markets are pricing only a two-thirds chance of a move before mid-year. Yet futures are now betting on as many as four rate cuts over the remainder of the year.
Meanwhile, President Donald Trump renewed his criticisms of Fed Chair Jerome Powell on Tuesday, saying the central bank head was not doing a good job.
The deluge of corporate earnings and outlooks provided little solace. Despite some softening of tariff hits on the auto sector on Tuesday, General Motors pulled its outlook for the year and UPS slashed jobs. Firms in America and around the world raised the alarm about the rest of 2025.
And the picture in the bruised tech sector was little better.
With investors awaiting megacap earnings from Microsoft and Meta after today's close, shares in artificial intelligence server maker Super Micro Computer plunged 17% after it cut its third-quarter revenue and profit expectations due to delays in customer spending.
Broader markets remain calmer, however, and S&P 500 futures are only marginally negative ahead of the bell. Ten-year Treasury yields edged lower to near three-week lows and the dollar nudged higher.
Some slivers of optimism in the trade war emanated from Washington and Beijing, as both appear to be gradually backing away from their extreme trade embargo.
While the U.S. has loosened auto tariffs, China has created a list of U.S.-made products that will be exempted from its 125% tariffs and is quietly notifying companies about the policy.
In Europe, markets were more upbeat, with first quarter euro zone GDP coming in ahead of forecasts with a surprise 0.4% quarter-on-quarter expansion.
European bank earnings dominated the micro picture. UBS, Barclays and Societe Generale all beat forecasts - but only SocGen saw its shares rise on the day.
And now for today's column, which looks at how once-unloved British markets are getting a fresh boost, with sterling near 9-year highs and the FTSE 100 on its longest winning streak since 2016/17.
0 comentários:
Postar um comentário