US Q1 GDP Turns Negative

Economic Data

- (PT) Portugal Apr Retail Sales M/M: +0.8% v -3.4% prior; Y/Y: 3.5 v 1.8% prior
- (PT) Portugal Apr Industrial Production M/M: 1.1% v 1.7% prior; Y/Y: -0.5% v +3.8% prior
- (PT) Portugal Q1 Final GDP Q/Q: 0.4% v 0.4%e; Y/Y: 1.5% v 1.4%e 
- (IT) Italy Apr PPI M/M: -0.1% v -0.1% prior; Y/Y: -2.3 v -3.1% prior
- (BR) Brazil Q1 GDP Q/Q: -0.2% v -0.5%e; Y/Y: -1.6% v -1.8%e; GDP 4Qtrs Accumulated: -0.9% v -0.9%e 
- (IN) India Q1 GDP Y/Y: 7.5% v 7.3%e; GDP Annual Estimate Y/Y: 7.3% v 7.4%e 
- (US) Q1 Preliminary GDP Annualized (2nd reading) Q/Q: -0.7% v -0.9%e; Personal Consumption: 1.8% v 2.0%e 
- (US) Q1 Preliminary GDP Price Index: -0.1% v -0.1%e; Core PCE Q/Q: 0.8% v 0.9%e 
- (CA) Canada Mar GDP M/M: -0.2% v +0.2%e; Y/Y: 1.5% v 2.1%e; Quarterly GDP Annualized: -0.6% v +0.3%e
- (US) May ISM Milwaukee: 47.7 v 50.0e 
- (US) May Chicago Purchasing Manager: 46.2 v 53.0e
- (US) May Final University of Michigan Confidence: 90.7 v 89.5e 

European stocks closed at their lows and US stocks are seeing big losses, with all major sectors in the red. The 10-year UST yield is down two basis points and at its lows of the month. As of writing, the DJIA is down 0.70%, the S&P500 is down 0.62% and the Nasdaq is off 0.52%.

As expected, Q1 US GDP turned negative in the second reading, dropping to -0.7% from the +0.2% advance report. The contraction was slight less than expected. Personal consumption was revised slightly lower. The decrease primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending. The U of Michigan's consumer sentiment survey was two points higher than the early reading, though it was still down five points from April's very buoyant level. 

WTI crude move back up toward $60 after midweek softness as OPEC started talking ahead of its meeting in Vienna next week. The Russians will be meeting with OPEC figures ahead of the conference, however today Russia Energy Minister Novak confirmed that Russia and OPEC would not agree to specific crude production levels at the confab. Few expect anything new out of OPEC at the main meeting. Brent rose nearly two bucks to trade $64. 

The euro continued weakening after the US GDP data, but EUR/USD turned around after topping 1.1000 midmorning and fell back to 1.0960. The loonie is getting hammered after a big miss in the March Canada GDP report, testing above 1.2500 for a second time this week. Canadian economic growth contracted by 0.1% from the previous quarter, the economys worst performance since mid 2009. 

Looking Ahead

- 12:00 (CO) Colombia Apr Urban Unemployment Rate: 9.6%e v 10.1% prior; National Unemployment Rate: No est v 8.9% prior
- 13:00 (US) Weekly Baker Hughes Rig Count 
- 15:00 (AR) Argentina Apr Construction Activity M/M: No est v 1.6% prior; Y/Y: No est v 8.1% prior
- 15:30 (MX) Mexico Apr YTD Budget Balance (MXN): No est v -100.4B prior