Market wrap: US equities take another hammering – ANZ

In a market wrap, analysts at ANZ Bank New Zealand  Limited  noted that even with the above-expectations US GDP figures, equities got another hammering to close out the week.  

Key Quotes:

“The S&P500 closed down 1.7% and the Nasdaq down 2.1%, having been considerably lower earlier in the session. The falls were propelled by disappointing results from Amazon and Alphabet. European markets didn’t fare much better, with the German DAX down 0.9% and France’s CAC 40 down 1.3%. The risk-off environment boosted sovereign bonds, with 10-year Bund yields down 5bp and UST 10-year yields down 4bp to 3.08%. Oil prices were little changed, with WTI up 0.4% at USD67.59bp. Gold spiked but weakened markedly in the close to give up almost all of its gains.”

“Not that anyone was paying attention, but Q3 GDP data was slightly above expectations. GDP grew 3.5% q/q in annualised terms.  

The biggest contributors were personal consumption and a strong inventories build, which added 2.7%pts and 2.1%pts to the headline figure respectively. Net exports detracted 0.4%pts, largely reflecting timing effects caused by tariffs.  

Business investment growth slowed to 0.8%, and residential investment declined for a third consecutive quarter. Overall, the numbers indicate the economy continues to be supported by the sugar hit from the tax cuts and fiscal stimulus, but the effects from this may be short-lived, given the easing in investment.  

In other data, Michigan Consumer Sentiment fell slightly. The assessment of current conditions dipped, likely reflecting recent market volatility. Expectations of economic conditions improved a touch.”