U.S. GDP Weaker than Expected

by Archer Financial Services | Jun 28, 2018

By Alan Bush | Senior Financial Economist at ADMIS   


Yesterday stock U.S. index futures opened with strong gains, but turned lower in the afternoon after White House economic adviser Larry Kudlow said President Trump’s announced plan did not indicate a softening stance on China.

Stock index futures are lower today, as global trade worries persist.

U.S. gross domestic product expanded at an annual rate of 2% in the first quarter, according to the Commerce Department. That was weaker than an earlier estimate of 2.2% growth.  Economists had forecast a 2.2% rate.

However, first quarter corporate profits were revised to show an increase of 10.6%, which compares to the originally reported gain of 7.8%.

Initial weekly U.S. jobless claims rose 9,000 to 227,000 in the week ended June 23. Consensus forecasts had called for initial claims to be 220,000.  

We are seeing less and less flow of funds into the flight to quality markets such as Treasuries and the Japanese yen even though the global trade situation appears to be getting no better.



The U.S. dollar turned lower and the euro currency advanced due to news of rising inflation in some regions of Germany, which held above the target rate set by the European Central Bank.

Also, the euro was supported by news that euro zone business confidence in June held up in the face of fresh tariffs.

The British pound continued to decline after yesterday it was reported that London house prices declined, as U.K. property values continue to soften.



Futures are only mixed in spite of the weaker than expected and bullish gross domestic product report, which should be viewed as a sign of weakness.

St. Louis Federal Reserve Bank President James Bullard will speak at 9:45 central time.

The Treasury will auction seven year notes today.

The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 70%, which compares to 74% yesterday.



September 18   S&P 500

Support    2691.00       Resistance    2722.00


September 18   U.S. Dollar Index

Support    94.660         Resistance    95.310


September 18   Euro Currency

Support    1.15880       Resistance    1.16770


September 18   Japanese Yen

Support    .91030         Resistance    .91560


September 18   Canadian Dollar

Support    .75000         Resistance    .75470


September 18   Australian Dollar

Support    .7326           Resistance    .7377


September 18   Thirty Year Treasury Bonds

Support    144^24        Resistance    145^12


August 18   Gold

Support    1248.0         Resistance    1260.0


September 18   Copper

Support    2.9550         Resistance    3.0100


August 18   Crude Oil

Support    72.07           Resistance    73.13

For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.com. Thank you.

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