US GDP reading at 2.4% comes in lower than 2.6% expectations
Market pundits have been squawking about a slowing economy, but many have disagreed by how much. Goldman Sachs last week set their expectations to 2% while Briefing.com pinned the figure at 3%. Lower growth translate into lower growth in revenues for many companies giving earnings top line pressure. This pressure will continue to place a heavy emphasis on controlling the bottom line. However, the important indicator will be how the stock market reacts to the news throughout the day.
We can sit here and speculate the market’s reaction, but ultimately no one really knows where we are headed. Futures are pointing to a lower open, but a swift rebound with volume will settle where this market will ultimately will want to go. The negative side here is yesterday’s action where the market was able to find footing get into positive territory only to sell off in the final 45 minutes of trading. If this market was strong we would have been able to finish in the green, but we finished the day with distribution.
The NASDAQ now has 3 days of distribution and one day of stalling in the past 4 weeks. This is a red flag for those who are long and why it is ok to take some profits along the way. Always cut your losses.
