We will have an important piece of economic data in an hour when Gross Domestic Product (GDP) is released. Right now earnings have been driving equities lower — and this morning equities are looking pretty darned weak, based on earnings from big tech.
We are looking at a forecast GDP of +4.7% compared to 2.1% last quarter. For the sake of interest rates we badly need to see a number at or below forecast. The FOMC meets next week and I think the ‘no hike’ is baked it–but if we see a few more hot economic number we will see a hike at the next meeting–forget thoughts that the Fed is finished–these economic numbers are not saying ‘finished’.
We also have jobless claims in an hour–we badly need this number to soften (grow larger). Last week it was below 200,000 at 198,000–this needs to change. I believe that the Fed is bound and determined to drive unemployment higher to wring inflation out of the system.
Equity futures are off 2/3% percent right now and the 10 year treasury is at 4.97% after a very hot new home sales number yesterday. If we get hot economic numbers in an hour over 5% we go.
Buckle up as the day could be a wild one.