The closely watched Atlanta Fed GDPNow model now shows first-quarter growth tracking at 0.1 percent, compared to a 0.4 percent estimate earlier in the week. JPMorgan economists now forecast the economy only expanded by 0.2 percent in the first quarter, from 0.7 percent.
2--U.S. Braces for Worst Earnings Season Since 2009 Crisis: Chart
U.S. corporate profits are expected to drop the most in 6 1/2 years in the first quarter, led by a wipeout in the embattled energy sector. Earnings for companies in the Standard & Poor’s 500 Index will fall 9.8 percent year-over-year, which would be the sharpest decline since the third quarter of 2009 and a fourth consecutive quarter of contraction, according to Bloomberg data. Results will be insufficient to justify current stock valuations, says Alex Bellefleur, head of global macro strategy and research at Pavilion Global Markets.
The Atlanta Fed updated their GDP estimate for the 1st quarter earlier today, and once again it is to the downside. The new GDP growth estimate is 0.1% vs. 0.4% last reported on April 5. The decline was attributed to the wholesale trade report from the US Bureau of Census. The forecast for the contribution of inventory investment to the 1st quarter to real GDP fell from -0.4% to -0.7%.