Equites initially climbed across the board and bonds fell after data indicated the economy is strong despite elevated rates and a disappointing outlook from market leviathan NVDA.
As noted several times, the hype around NVDA’s result was intense. The overall immediate ramification was a nothing burger.
A late afternoon selloff sent the NASDAQ down about 0.25% and the S & P 500 unchanged, perhaps the result of a significant sell program. The typical stock, however, was up as Bloomberg reports 75% of the companies in the S & P 500 advanced. The Russell 2000 gained about 1%.
Commenting on GDP, the economy grew at a 3% annual rate during the second quarter, up from the previous estimate of 2.8%. The economy’s main growth engine—personal spending—advanced 2.9% versus the prior estimate of 2.3%.
Four weeks ago, following the July employment report, the market was inundated with rumors that the Fed might have a rare interbank interest rate cut by as much as 50 bps to prevent a recession.
After yesterday’s data, swaps trimmed the odds of 100 bps of easing by year’s end.
Both oil and gold advanced perhaps upon a further rise in Middle East tensions, an increase in tensions in both Libya and Isreal/Iran/Hezbollah.
What will happen today? Trading is expected to wane as the day progresses, ahead of the three-day Labor Day weekend.
Last night the foreign markets were up. London was up 0.36%, Paris up 0.54% and Frankfurt up 0.25%. China was up 0.68%, Japan up 0.74% and Hang Seng up 1.14%.
Dow and NASDAQ futures are up 0.25% and 0.75% ahead of the monthly core PCE data. Analysts are expecting a 0.2% monthly increase and a 2.7% increase year-over-year. The 10-year is up 1/32 to yield 3.86%.
