US data deals a blow to the rally
Stocks take a tumble following GDP shock
“Markets had been rubbing along relatively happily until today’s US data, which seemed to give form to investors’ worst nightmares. Negative GDP, a first in 3 years, weaker jobs growth and higher wages are the potent combination of stagflation. Inevitably, the market has ignored the fact that the imports side of things drove the decline in growth, and given the huge rebound in stocks some volatility at month-end was not surprising. It’s up to tech earnings now to provide some much-needed cheer to finish up April.”
Can stocks sustain their bounce beyond April?
“A month like April, where stocks take a nasty tumble but then claw their way back again, is a rare occurrence. But when it does happen, it has often formed the low in the selloff. 2008 is the exception, but then again when isn’t 2008 the exception. Yesterday’s consumer confidence showed how panicked Americans are, which at least provides hope that data in May and June might assuage some of their worst fears.”
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