Second Reading of GDP Falls Less Than Expected

Economic Data

- (DE) Germany Feb CPI Baden Wuerttemberg M/M: +0.9 v -1.0% prior; Y/Y: 0.0% v 0.1% prior
- (PT) Portugal Q4 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 0.7% v 0.7%e
- (IE) Ireland Jan Retail Sales Volume M/M: 3.3% v 0.7% prior; Y/Y: 8.8% v 5.6% prior
- (IN) India Weekly Forex Reserves w/e Feb 20th: $334.2B v $333.2B prior
- (ZA) South Africa Jan Trade Balance (ZAR): -24.2BB v -7.8Be
- (CL) Chile Jan Total Copper Production: 524.3K v 522.7K tons prior
- (BR) Brazil Jan Total Formal Job Creation: -81.8K v -23.5Ke
- (DE) Germany Feb Preliminary CPI M/M: 0.9% v 0.6%e; Y/Y: +0.1% v -0.3%e
- (DE) Germany Feb Preliminary CPI EU Harmonized M/M: 1.0% v 0.6%e; Y/Y: -0.1% v -0.5%
- (US) Q4 Preliminary GDP Annualized Q/Q: 2.2% v 2.0%e; Personal Consumption: 4.2% v 4.3%e v 4.3% advance
- (US) Q4 Preliminary GDP Price Index: 0.1% v 0.0%e; Core PCE Q/Q: 1.1% v 1.1%e
- (US) Feb ISM Milwaukee: 50.32 v 54.00e
- (MX) Mexico Jan Unemployment Rate (Seasonally Adj): 4.4% v 4.3%e; Unemployment Rate NSA (unadj): 4.5% v 4.5%e
- (US) Feb Chicago Purchasing Manager: 45.8 v 58.0e
- (US) Jan Pending Home Sales M/M: 1.7% v 2.0%e; Y/Y: 6.5% v 8.7%e
- (US) Feb Final University of Michigan Confidence: 95.4 v 94.0e

European stocks benefitted more than US names after the GDP data this morning, as Euro indices zoomed up to multi-year highs into the close of trading. Note that the ECB QE program begins in March and equities are sure to be a prime beneficiary. As of writing, the DJIA is down 0.15%, the S&P500 is flat and the Nasdaq is down 0.14%.

The second reading of US Q4 GDP was more moderate than the advance reading, +2.2% versus +2.6%. While overall growth was revised down, consumer spending climbed by the most in four years, underscoring the fundamental strength of the expansion. Meanwhile, the February Chicago PMI index was the latest US regional manufacturing indicator to show pretty poor results. The index dropped into the red to its worst level since July 2009 and its first contraction since April 2013.

Three Fed speakers were out with remarks this morning. Moderate Lockhart said he would support rate hikes if there was evidence of firming inflation, and emphasized that the FOMC needs to weigh weak inflation data against good growth and job gains. Hawkish member Mester (a non voter) warned that holding rates low for too long could damage confidence in the economy, clashing with the dovish Dudley (voter) who thinks its riskier to raise rates early than to hold off and wait.

In earnings, SandRidge is down 4% after gaining as much as 8.5% in the premarket. Like most smaller E&P firms, the company has been hit hard by the decline in oil prices, with revenues widely missing expectations. Monster Beverage is up nearly 14% after crushing expectations and getting price target upgrades. The Gap is seeing a modest +3.7% gain after meeting expectations, topping up its share buyback and raising the quarterly dividend. Sales comps were pretty good, but FY guidance was not. JCPenny widely missed earnings targets, although other aspects of its quarterly report looked decent. The CEO said that its January and February sales have been strong. Shares of JCP fell 15% in the post market, but have recovered about half those losses in the interim. 

Looking Ahead

- 13:00 (US) Weekly Baker Hughes Rig Count
- 13:30 (PT) ECB's Constancio (Portugal) in NY
- 14:00 (AR) Argentina Jan Construction Activity M/M: No est v -4.0% prior; Y/Y: No est v 0.3% prior
- 14:00 (AR) Argentina Dec Economic Activity Index (Monthly GDP) M/M: No est v -0.1% prior; Y/Y: 0.4%e v 0.2% prior
- 19:00 (KR) South Korea Feb Trade Balance: No est v $5.5B prior; Exports Y/Y: No est v -0.4% prior; Imports Y/Y: No est v -11.0% prior
- 20:00 (CN) China Feb Manufacturing PMI: No est v 49.8 prior
- 20:00 (CN) China Feb Non-manufacturing PMI: No est v 53.7 prior