Trading with point and figure

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below 50%= weakness IMHO

 

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38.25 is rez
excellent stuff

 

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its trying to build support

 

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38.2% could get blown out

 

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scalp sells off our 38.2

 

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I never tell a Fib.....only porkies

 

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still no crunch...as yet

 

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fib and a pivot

 

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need to see if 1.2430 is rez on any bounce

 

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Range looks to be goin into a squeeze

 

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and pop...finally

 

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US 2019 Q2 Advance GDP thoughts - "Slower than Q1, but much stronger in the detail"

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Ostwald, Marc

14:24 (30 minutes ago)

to Marc

US Q2 Advance GDP thoughts - "Slower than Q1, but much stronger in the detail"

- Overall a little better than expected at 2.1% SAAR vs. expected 1.9%, but made the more impressive by the strength seen in the key Final Sales to Domestic Buyers at 3.5% SAAR, after two rather lukewarm quarters (Q1 1.8% and Q4 1.3%).

In the detail:

a) Personal Consumption - after an upwardly revised but still tepid Q1 (1.1% from 0.9%), the consumer roared back in Q2, with a somewhat better than expected 4.3%, with strength quite broad based (Durables contributing 0.86 ppt, Non-Durables 0.81 ppt, Services 1.17 ppt). There will of course be those that note that housing investment fell for a fifth quarter (-1.5% following -1.0% and Q4 -4.7%), though a look at that in terms of contribution to GDP terms -0.06 ppt, -0.04 ppt and -0.18 ppt serves as a reminder that housing is very much a marginal item.

b) Business Investment - Overall down 0.6% SAAR, but will all the weakness in structures (-0.34 ppt), with a very marginal gain in Equipment (0.04 ppt) and a solid gain in intellectual property (0.22 ppt).

c) Inventories / Trade - As expected and following strong contributions to Q1, Trade (-0.65 ppt vs. Q1 +0.73 ppt) and Inventories (-0.86 ppt vs. Q1 +0.53 ppt) were the expected big drags on headline GDP.

d) Govt spending - Federal spending was extremely strong 7.9% SAAR (or 0.51 ppt contribution), while State & Local at 3.2% SAAR was around the same level as Q1; there may be some payback in Q3 for that strength at the Federal level.

e) Deflators - headline GDP deflator rebounded to 2.4% (same as 2018), while the core PCE deflator was modestly below forecasts at 1.8% up from a downardly revised 1.1% in Q1, and back around the Q4 and overall 2018 pace. The Bullards and the Kashkaris will doubtless fret about this, but that is symptomatic of the sort of micro-management, which lacks a proper perspective, both of inflation trends and what central banks can actually achieve with their policy adjustments

"Take home": In days of yore, when the Fed largely paid lip service to international developments, the strength in Final Sales would have been enough for any thoughts about easing policy to be rendered totally 'out of court'. But these are not those times, though one would imagine the likes of Rosengren and George, perhaps even Quarles, may well feel even more justified in dissenting against the now well discounted rate cut next Wednesday.

(Tables below are SAAR rates, with ppts Contributions to GDP on page 8 in the attached BEA PDF)

..........................................................................

MARC OSTWALD
Global Strategist & Chief Economist

 

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lining up

 

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still below 50%

 

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dump
now back in fib support

 

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And our pivot

 

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lets see if it gets bought

 

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buyers in with a chance