Markets were fairly quiet overnight following the ECB headlines yesterday as investors shifted their focus back to next week’s FOMC meeting, while also digesting more mixed corporate earnings. Treasuries were slightly higher prior to the release of the 2Q GDP report, but nudged lower as the GDP Annualized grew 2.10% quarter-over-quarter versus an expected 1.80% growth per consensus. U.S. stocks opened stronger this morning despite the better than expected increase in gross domestic product with the continued expectation for a Fed rate cut in next week’s policy meeting outweighing the data. In corporate earnings, Twitter and Alphabet rallied after their sales beat estimates, pushing the S&P 500 and Nasdaq 100 indices towards record highs. Meanwhile, Amazon slipped slightly lower that its estimated earnings.
More on the economic calendar, the first quarter GDP report remained unchanged at its 3.10% growth. Personal Consumption rose 4.30% in quarter two against an expected 4.00% growth, while the first quarter’s report was revised higher from 0.90% to 1.10%. GDP Price Index also came in stronger than expected, jumping 2.40% versus 2.00% per consensus; 1Q was also revised higher from 0.90% to 1.10%. Lastly, the Core PCE rose 1.80%, slightly weaker than the expected 2.00% increase, while 1Q report also showed a slight downward revision from 1.20% to 1.10%.
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Markets were fairly quiet overnight following the ECB headlines yesterday as investors shifted their focus back to next week’s FOMC meeting, while also digesting more mixed corporate earnings. Treasuries were slightly higher prior to the release of the 2Q GDP report, but nudged lower as the GDP Annualized grew 2.10% quarter-over-quarter versus an expected 1.80% growth per consensus. U.S. stocks opened stronger this morning despite the better than expected increase in gross domestic product with the continued expectation for a Fed rate cut in next week’s policy meeting outweighing the data. In corporate earnings, Twitter and Alphabet rallied after their sales beat estimates, pushing the S&P 500 and Nasdaq 100 indices towards record highs. Meanwhile, Amazon slipped slightly lower that its estimated earnings.
More on the economic calendar, the first quarter GDP report remained unchanged at its 3.10% growth. Personal Consumption rose 4.30% in quarter two against an expected 4.00% growth, while the first quarter’s report was revised higher from 0.90% to 1.10%. GDP Price Index also came in stronger than expected, jumping 2.40% versus 2.00% per consensus; 1Q was also revised higher from 0.90% to 1.10%. Lastly, the Core PCE rose 1.80%, slightly weaker than the expected 2.00% increase, while 1Q report also showed a slight downward revision from 1.20% to 1.10%.
The curve has bear-flattened with the UST 10-Year yield slightly up 0.3 bp from prior closing.