Final Q3 GDP Revised Higher

Economic Data

- (US) ICSC Chain Store Sales w/e Dec 19th: w/w: 3.4%; y/y: 3.1%
- (ES) Spain Nov YTD Budget Balance: -€35.6B v -€30.9B prior
- (US) Q3 Final GDP Annualized Q/Q: 5.0% v 4.3%e; Personal Consumption: 3.2% v 2.5%e
- (US) Q3 Final GDP Price Index: 1.4% v 1.4%e; Core PCE Q/Q: 1.4% v 1.4%e
- (US) Nov Durable Goods Orders: -0.7% v +3.0%e; Durables Ex Transportation: -04% v +1.0%e; Capital Goods Orders (Non-defense/Ex-aircraft): 0.0% v +1.0%e; Capital Goods Shipments (Non-defense/Ex-aircraft): 0.2% v 1.3%e; Durables Ex-Defense: -0.1% v -0.7% prior
- (CA) Canada Oct GDP M/M: 0.3% v 0.1%e; Y/Y: 2.3% v 2.1%e
- (US) Redbook Retail Sales w/e Dec 19th: +5.3% y/y, Dec MTD: -0.8% m/m; Dec MTD: +4.4% y/y
- (US) Oct FHFA House Price Index M/M: 0.6% v 0.3%e
- (BE) Belgium Dec Business Confidence: -6.9 v -5.7e
- (US) Dec Final University of Michigan Confidence: 93.6 v 93.5e
- (US) Dec Richmond Fed Manufacturing Index: 7 v 8e
- (US) Nov New Home Sales: 438K v 460Ke
- (US) Nov Personal Income: 0.4% v 0.5%e; Personal Spending: 0.6% v 0.5%e
- (US) Nov PCE Deflator M/M: -0.2% v -0.1%e; Y/Y: 1.2% v 1.2%e; Nov PCE Core M/M: 0.0% v 0.1%e; Y/Y: 1.4% v 1.5%e

The DJIA rose above the psychologically important 18000 level this morning just a few sessions after the S&P500 retook 2000. However, the slide in the Nasdaq - led by plunging biotech stocks - has weighed on stocks mid morning. As of writing, the DJIA is up 0.44%, the S&P500 is up 0.20% and the Nasdaq is down 0.23%

Markets are digesting contrasting US GDP and durable goods data this morning. The third and final reading of third quarter GDP was revised up to +5.0% from +3.9% in the second reading. Over the last two quarters, US GDP has risen at its highest rate since 2003. Personal spending was revised up to +3.2% from +2.2% prior. The November durable goods orders report contrasted sharply with the upbeat GDP reading, with all five major components widely missing expectations, and the headline figure in contraction.

The excellent GDP data has further strengthened the greenback and helped send the dollar index out to nine-year highs. EUR/USD dipped below 1.2180 and USD/JPY is headed for 121. USD/RUB remains around 55 following reports that Russia PM Medvedev told the country's largest state exporters to sell off their foreign currency reserves to help stabilize the currency.

WTI crude is once again hovering around $55 this morning. Gulf OPEC members were commenting earlier that they expect global oil prices to rebound to $70-80 by the end of 2015 as the global economic recovery revives demand. In a CNBC spot, T Boone Pickens said lower North America rig counts and shale industry consolidation would help the US energy sector in 2015.

Biotech is getting hit hard for a second consecutive session this morning as traders examine the repercussions of the Express Scripts/AbbVie deal. The Nasdaq index is being pulled lower by the losses, and the Nasdaq Biotech index is down 3.3% as of writing, its biggest intraday loss since April. Shares of ISIS and CELG dropped nearly 7% a piece, GILD was down as much as 4% and AMGN was down more than 3%.

Looking Ahead

- 11:30 (BR) Brazil Nov Total Federal Debt (BRL): No est v 2.155T prior
- 13:00 (US) Treasury to sell $35B in 5-Year Notes
- 16:00 (KR) South Korea Dec Consumer Confidence: No est v 103.0 prior
- 16:30 (US) Weekly API Crude Oil Inventories
- 23:30 (TW) Taiwan to sell TWD30B in 3-month Bills
- (PT) Portugal Nov YTD Budget Report
- (AR) Argentina Dec Consumer Confidence Index: No est v 43.7B prior