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Wells Fargo analysts suggest that market participants’ attention will turn to the release of US Q4 GDP on Thursday.

Key Quotes

“Given that it has been more than a month since the originally scheduled release date, the Census Bureau has decided this will be a combined release of the first and second estimates of Q4 growth.”

“Recent data have pointed to a slower-than-anticipated pace of growth in the final months of the year. As such, we have reduced our Q4 GDP growth forecast to 2.0% from 2.3% previously.”

“Consumption growth is likely to be weak, as retail sales plummeted 1.2% in Dec (the largest one-month decline since 2009). However, as we noted, it was hard to square the plunge in sales with other variables, which suggests revisions may eventually be in order.”

“Business fixed investment, on the other hand, may surprise to the upside. The advance estimate of durable goods data for December revealed a rise in capital goods shipments, which bodes well for Q4 investment spending.”