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U.S. GDP Outperforms Expectations

To the surprise of many economists, today’s U.S. GDP (Q4, 2018) report came in relatively strong at 2.6%. Consensus estimates predicted the figure to be 2.3%, beneath the previous release of 3.4%. The report turned out to be a positive one, yet the DJIA(-10), S&P 500 SPX (-2), and NASDAQ (-15) have opened in the red.

Aside from quarterly GDP, there were several other metrics released during the pre-market hours. Here is a quick look at the data:

Event                                                                  Actual        Projected        Previous

Continuing Jobless Claims (Feb. 15)             1.805M           1.733M            1.726M

Core Personal Consumption (Q4)                1.7%                  1.6%                1.6%

GDP Annualized (Q4)                                      2.6%                 2.3%                 3.4%

GDP Price Index (Q4)                                      2.0%                  1.7%                1.5%

Aside from growing jobless claims, this set of numbers came in decisively positive. GDP outperformed expectations as did Core Personal Consumption. Both of these figures come as a surprise following the dismal Retail Sales figures from December. While the U.S. economy has slowed a bit, it still performed well throughout 2018 and equities are reflecting that strength.

U.S. GDP Release Doesn’t Do Much For The Indices

During the U.S. overnight, the March E-mini S&P 500 fell modestly amid light participation. This has been the norm lately ― tight daily ranges and whipsaw action for the S&Ps.

March E-mini S&P 500 (ES), Daily Chart
March E-mini S&P 500 (ES), Daily Chart

Overview: For the March E-mini S&Ps, there really isn’t a whole lot going on at the moment. Daily trading ranges are limited and this market is stuck in the mud near 2800.00. However, the 2019 bullish trend remains valid. With the first trading day of March rapidly approaching, this market may be gearing up for a break above December’s High (2819.00) in the near future.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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