Sorry To See U Go, We Hardly Knew U
Edited by George Stahl
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
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9:26 (Dow Jones) Rebound in 1Q GDP means V-shaped recovery is back on cards.
And with consumption deflator jumping, inflation fears should return. But,
says ING Barings, with growth rather than inflation still the market focus,
scope for "Fed cut in May remains in place, though presumably diminished."
(NEH)
9:22 (Dow Jones) Analyst says in contrast to the 100% chance of a 25 basis
point ease by the May FOMC meeting which the May contract priced in
Thursday, contract now pricing in a 100% chance of a 15 basis point cut by
the meeting, in effect taking out most of the probability of any cut at all.
(CMN)
9:18 (Dow Jones) Merrill Lynch remains cautious on Intel (INTC) after
attending the chip giant's newsless analyst meeting. "Intel continues to
believe that the bottom of the PC cycle is already upon us. Comments provide
little additional evidence to sustain a substantive recovery scenario -
especially in the face of recent weak motherboard data from Asia." The firm
reiterates its neutral rating on the stock. (GS)
9:09 (Dow Jones) June S&Ps and Nasdaq are strong in electronic trade, with
Nasdaq at limit bid off of GDP numbers. "The market is very excited about
the numbers," says an off-floor trader. "It's going to give us a fantastic
start to the day, but what's more important is how we end." (DMC)
9:05 (Dow Jones) Assuming not revised lower, U.S. 1Q GDP bad news for those
looking for sub-4% federal funds rate, but won't prevent further "modest"
easing, says High Frequency Economics. "Fed still scared about 2/3Q," it
adds. (JMG)
8:59 (Dow Jones) Don't look to the tech sector for help in growing the
nation's economy, says Anderson & Strudwick strategist Kent Engelke. "We
don't think it will be the technology sector because American corporations
have over spent in capital stock. There is too much capacity in this sector
and it must be worked off. This has excellent inflationary expectations but
poor earnings growth ramifications." (GS)
8:51 (Dow Jones) A swoon in Starbucks (SBUX) Friday following lower revenue
guidance represents a buying opportunity, says Lehman Brothers' Mitch
Speiser. He says slippage to the $32-$34 range, or about 30 times forward
earnings, has been a previous bottom. While the company lowered same-store
sales targets late Thursday, Speiser says "we do not believe this is the
beginning of the end for Starbucks and a 40-times-earnings multiple." (RLG)
8:48 (Dow Jones) The foreign trade deficit narrowed by $40 billion in Q1,
which exactly offsets the contraction in inventories. Thus, it looks like
demand was met by drawing down inventories, not by importing goods. (JM)
8:46 (Dow Jones) Given the widely held view that the current slowdown is
investment-led, not consumer-led, the 1.1% rise in 1Q business investment
will be heartening to some. Of course, the computer and software spending
part of that - the most dramatically affected by the slowdown - was still
down. Remember, though, this isn't the final GDP number. (MC)
8:43 (Dow Jones) EUR slips under USD.9000 for the first time Friday after
U.S. GDP data came in much stronger than expected for the 1Q. Is this just a
short-term reversal or an early end to the EUR's recent strong performance?
(NEH)
8:42 (Dow Jones) Welcome as the GDP data showing growth was, it is an
advance report. Data on fixed investment, foreign trade, and the change in
inventories are only for two of the three months. There is a danger of
downward revision, but unlikely to go from +2.0% to zero. (JM)
8:40 (Dow Jones) EUR/USD ticked down to intraday low at $0.8989 from $0.9025
on the strong Q1 GDP number, and is now bouncing. 2% growth aside, some are
starting to revive the interest-rate differential argument - now in the
euro-zone's favor. USD/JPY little affected by data at Y124.07. (JEN)
8:39 (Dow Jones) Business inventories declined by $7.1 billion, but real
final sales were up by 4.6%. This shows that the economy is making
significant progress at getting inventories into line with demand. (JM)
8:38 (Dow Jones) GDP growth quickened a bit to a 2.0% annual rate in the
first quarter, twice as strong as in the fourth quarter. PCE deflator was
up 3.3%, also much more than in Q4. On balance, the economy appears to have
comfortably skirted recession in Q1. (JM)
8:37 (Dow Jones) Treasurys are selling off after much stronger than expected
GDP of 2% for Q1. 10yr note is dn9/32 to yiled 5.25%. (MM)
8:35 (Dow Jones) Is is good or bad news for stocks that the nation grew more
than expected in the first quarter? It's good because, with 2% growth, the
country isn't close to a recession and the number suggests better earnings
possibilities for companies. However, the stock market might interpret it as
bad news because it may suggest fewer Fed cuts in the future. Stock futures,
though, rise immediately after the GDP number. (GS)
8:29 (Dow Jones) Again, earnings and economic data will dominate trading. So
far, though, bad earnings news and outlooks haven't really affected the
markets, which have been able to hold onto their April gains better than
many have expected. Economic data, on the other hand, have been more
influential. We should get a better idea of the country's recessionary state
with the release of the preliminary first quarter GDP figures at 8:30 a.m.,
forecast is for 1%, and with Fed Chairman Greenspan's expected speech to a
bond market group. Yesterday's tame employee cost index reduced fears of
inflation, so any hint of a recession today would raise hopes for more Fed
cuts. Futures indicate opening flat to slightly higher. Asia mixed. Europe
lower. (GS)
(END) DOW JONES NEWS 04-27-01
09:26 AM
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