Before the Bell - Encouraging word came this morning from the Commerce Department, releasing preliminary GDP growth for the first quarter at a sizzling 6.4% annual rate. While this was a tad below expectations, it represents the fastest quarterly growth since 2003. Retail sales helped to drive the expansion. Also this morning, Labor Department figures showed 553,000 new jobless filings (a pandemic low).
A generally solid April will come to a close tomorrow, but before it does there will be two more critical economic reports to evaluate.
Meanwhile, tomorrow morning, the Labor Department will issue data on wholesale or producer prices. Recently, this inflation category has shown some inflationary pressures, and this pickup has led to a further rise in yields on Treasury issues. Treasury note yields are up to 1.67% as a result of price pickup indications. The government will also issue data on personal income and spending. As for the stock market, the futures are suggesting a nicely higher opening this morning. The most recent FOMC meeting which saw the Fed leave interest rates unchanged, and the report seems to bolster the continuing bull market
Widespread expectations are that the Fed will hold rates at these record low levels until 2024, as neither inflation nor the labor market is likely to be in full recovery mode until that time.
In other news, earnings continue to come in at a rapid clip, with Dow components Microsoft (MSFT) and Apple (AAPL) were among the heavyweights to issue their metrics before and after the market's close yesterday. In the case of the former, it beat projections handily, but apparently not by enough, as the issue fell more than $7.00 a share. Then, after the close iPhone behemoth Apple issued its quarterly statement to rave reviews and that stock is gaining handily in the pre-market.
Regarding the stock market, it traded in a narrow and mostly mixed pattern yesterday, with the NASDAQ in and out of the green before a late fade that sent that composite modestly into the red. The Dow, meantime, was in the minus column throughout the day and it, too, ended on a low note, falling 165 points, in part on a weak showing for embattled aerospace and defense giant Boeing (BA). Breaking things down, five sectors gained yesterday, led by energy, and a like number fell, with technology the poorest performer on the day. Looking to the day ahead, the equity futures are indicating a higher open. – Harvey S. Katz, CFA