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.”
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