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GDP Beats but Revisions Are Rough

by Steve Patterson on Friday, July 31, 2009 9:56 AM

GDP Beats but Revisions Are Rough

The market news today is mixed along with the action of the indexes. The GDP for the 2nd quarter of 2009 was better than expected but past quarters were worse than thought. I guess in the long run only the next quarter matters, the most recent is interesting, and the past are in the past.

GDO Revisions

The prior quarter’s revision from a poor –5.5% to an even worse –6.4% gives everyone pause but it really has no affect on the current situation and the markets are always looking to the future for buying inspiration. And that is what the -1.0% in the 2nd quarter should provide. The recession is ending after four quarters of negative growth in the 3rd quarter and some government policies are working like the Cash for Clunkers program.

Next Week Economic Numbers

Next week the market expects more mixed news with good numbers on Construction Spending, the ISM Index, Personal Spending, Pending Home Sales, Hourly Earnings, and Non-Farm Payrolls. But expectations are for worse than prior numbers for Personal Income, Factory Orders, and the Employment Rate.

I think the improved outlook for the US in the third quarter will outweigh all of the news next week with some volatility around better than expected numbers and worse than expected numbers.

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9 comment(s) so far...

Anonymous 7/31/2009

It is good analysis. But Personal Income, Factory Orders, and the Employment Rate is main consideration for micro economy.Thanks for sharing

 
Anonymous 8/1/2009

With the market overextended, I'm very curious to see what next week brings with a whole set of numbers as you mentioned. <br><br>I must say, cash for clunkers are really having some impact here...I even know people around me who are taking advantage fo this.

 
Anonymous 8/3/2009

I would be interesting to know how the improved outlook will influence the rest of the world.

 
Anonymous 8/7/2009

A tendency to growth is definitely beginning to show itself. I do hope for the market rising.

 
Anonymous 8/7/2009

@hiro - What's the cash for clunkers got to do with this? just curious on your opinion

 
Anonymous 8/14/2009

Great, the GDP beats estimates. So what?<br><br>Everyone is throwing optimism to and fro. Frankly, it's a big guesstimate supported by your comments on the ugly revisions.<br><br>The only thing Cash for Clunkers is doing is giving the talking heads a topic that at least seems optimistic; unfortunately, I would be surprised if we see any significant benefit to the GDP as a result.

 
Anonymous 8/20/2009

I think we're definitely back in a bull market. I've been riding Apple nicely with options for the past couple of months...

 
Anonymous 8/21/2009

I believe that the bull market is right around the corner too. Everything is a cycle and ones it goes up it will go up really really high!

 
Anonymous 8/27/2009

I wonder why revisions are almost always down. It seems like there is a tendency to report better then it is and then revise it down later. Looks strange.

   
  
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