Stocks take a tumble following GDP shock
“Markets had been rubbing along relatively happily until today’s US data, which seemed to give form to investors’ worst nightmares. Negative GDP, a first in 3 years, weaker jobs growth and higher wages are the potent combination of stagflation. Inevitably, the market has ignored the fact that the imports side of things drove the decline in growth, and given the huge rebound in stocks some volatility at month-end was not surprising. It’s up to tech earnings now to provide some much-needed cheer to finish up April.”
Can stocks sustain their bounce beyond April?
“A month like April, where stocks take a nasty tumble but then claw their way back again, is a rare occurrence. But when it does happen, it has often formed the low in the selloff. 2008 is the exception, but then again when isn’t 2008 the exception. Yesterday’s consumer confidence showed how panicked Americans are, which at least provides hope that data in May and June might assuage some of their worst fears.”
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.