Morning Report: GDP revised upward 5/26/17

Vital Statistics:

Last Change
S&P Futures 2410.5 -3.0
Eurostoxx Index 380.9 -1.3
Oil (WTI) 48.8 -0.2
US dollar index 88.8  
10 Year Govt Bond Yield 2.24%
Current Coupon Fannie Mae TBA 102.6
Current Coupon Ginnie Mae TBA 103.81
30 Year Fixed Rate Mortgage 4

Stocks are lower this morning on no real news. Bonds and MBS are flat.

Today looks to be a relatively slow day ahead of the 3 day weekend. Markets should become illiquid in the afternoon as most of the Street will be on the LIE by noon.

First quarter GDP was revised upward from 0.7% to 1.2% in the second revision. Consumption was revised upward from 0.3% to 0.6% and PCE inflation was revised downward from 2.3% to 2.2%. The upward revision to GDP was higher than expected. The current tracking estimate for Q2 is around 3%.

Durable Goods orders fell in April by 0.7%. The core index, which excludes volatile transportation components fell 0.4%. Capital Goods expenditures were flat.

Corporate profits rose 12% YOY in the first quarter. For all of the handwringing over stock market valuations, the underlying profitability of Corporate America remains strong.

After this morning’s data, the implied probability of a June hike increased 4% to 87%.

Larry Summers is sticking with his “secular stagnation” thesis. He views secular stagnation as the defining economic issue of our times, and believes that governments aren’t doing enough fiscally to break out of it. He does raise a good point about the early 2000s: We had a huge trade deficit, tax cuts, super-easy credit, mid single digit unemployment, and a housing bubble. Yet all the economy could manage was adequate growth. With all of that stimulus, the economy should have been roaring like the late 90s. What is causing secular stagnation is anyone’s guess, but his Rx is infrastructure spending and fiscal stimulus.

19 Responses

  1. What is wrong with these people?

    Trump arrived to this seaside community late Thursday for the Group of Seven conference where allies will talk about a series of issues from trade to Russia. But Trump’s position on the Paris accord—particularly his pledge to leave the accord—is one of the most urgent matters for European leaders, who are committed to keep the Americans involved.

    Ever since he left the Middle East, Trump has been reminded how important the issue is to U.S. friends in Europe.

    At the Vatican, Pope Francis handed Trump his 181-page encyclical, “Laudato Si” (“Praise Be”), that largely blames man for climate change.

    What are these weirdos worried about? Trump’s an east coast liberal, of course he believes this crap. Are they stupid?


    • McWing:

      Are they stupid?

      They read the newspapers and believe them. So I guess that means the answer is yes?


  2. The NYT rends their garments over referring to a nonbinary gender thing as “she”

    This shit is just too funny


    • Brent:

      This shit is just too funny

      That was pretty amusing.


    • BTW…the whole “they” as a singular pronoun is a totally unnecessary and manufactured controversy. A gender-neutral, singular pronoun already exists and has existed for a very long time. There is no need to mangle grammar by saying things like “they is”. If someone objects to being called “he” or “she”, then the proper gender-neutral alternative is obvious…”it”.


      • Scott, the neutral singular for a human is “one” and the English continue to use it correctly.

        I have never found it difficult to use in formal writing or formal speaking, but sometimes it seems stilted in informal use.

        As you say, it is not as stilted as misusing “they”, which is downright confusing.


        • Mark:

          Scott, the neutral singular for a human is “one” and the English continue to use it correctly.

          Actually I believe “one” is used only when referring to an unspecified or unknown person, not when referring to directly to a person previously identified. You wouldn’t say “Mark went to the pharmacy because one had a headache but had run out of aspirin.”

          And there is precedent for using “it” for humans of undetermined sex. Pregnant women are often asked of their unborn babies if they have found out what sex “it” is.


        • …not when referring to directly to a person previously identified.

          Of course not.

          …only when referring to an unspecified or unknown person

          Certainly. This was the subject of the discussion, I thought.

          Consider: A possible gender rule for public rest rooms could be derived based upon whether one can piss accurately while standing and facing a urinal.

          “One” seems preferable to “they”.


        • Mark:

          This was the subject of the discussion, I thought.

          I was responding to the article Brent linked to which was the NYT fretting over how to refer to people who claim to have a “nonbinary gender identity”.

          Asia Kate Dillon, an actor from Ithaca, N.Y., is familiar to much of the viewing public as Taylor Mason, a fast-rising financial intern on the popular show “Billions.” Dillon plays the first gender nonbinary character on television, and in real life, as on the show, the actor also uses the pronoun “they.”

          Not in the pages of The New York Times, however. In an Op-Ed last Sunday that included a prominent reference to Dillon, the actor was referred to on second reference as “she.” It caught the attention of some readers, given the piece’s explicit reference to Dillon’s nonbinary identity.

          Here’s the criticism of reader Yee Ping of Kuala Lumpur, Malaysia. “I find it ironic that an article discussing censorship promptly proceeds to erase Asia Kate Dillon’s gender identity, referring to them as ‘her’ multiple times in the article,” Yee Ping wrote. “A simple Google to their Wikipedia article would have revealed the preferred pronoun.”


        • Got it. It.


    • Fifth: the international community wakes up and finds a way to circumvent the White House and free itself of its dependence on the U.S. Unlike the preceding four options, the fifth doesn’t directly solve the Trump problem, but it is nevertheless necessary – and possible.

      Sounds like a plan. Go for it. Take care of your own defense.

      The author sounds like a petulant young adult who bitches about his parents but is too lazy to move out on his own…


  3. Stephen Miller stirred up a Twitter shitstorm by buying a ticket to the women-only screening for Wonder Woman…

    Great point: After years of progressives demanding that businesses bake cakes and open bathrooms, it’s cathartic to see them reverse their position when it offends their consciences. Miller is offering them a minor, even friendly, clinic on the brave new world they have created.


  4. From my cold, dead hands, MoJo… From my cold, dead hands….


  5. This is awesome!

    Texas baby!


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