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Stocks End Week Lower Amid Revised GDP Numbers and Macroeconomic News

Strategic Insights

— 1 min read

Stocks finished the week lower as revised gross domestic product (GDP) numbers confirmed expectations that the economy shrank in the first quarter of the year. The second estimate of GDP showed a 0.7% contraction, down from the previous estimate of a 0.2% growth, but better than the forecasted 1% decline. This macroeconomic news, combined with a drop in the Chicago Purchasing Managers' Index (PMI) and an unexpected rise in initial jobless claims, contributed to the negative market sentiment.

Key Takeaways:

  • The second estimate of GDP showed a 0.7% contraction in the first quarter, down from the previous estimate of a 0.2% growth.
  • The Chicago PMI unexpectedly dropped 6.1 points to 46.2 in May, while initial jobless claims rose 7,000 to 282,000.
  • Markit's flash services PMI for May came in at 56.4, down 1 point from its prior reading and 0.1 point below expectations.
  • The pending home sales index rose 3.4% in April, while new home sales rebounded 6.8% to a 517K pace.
  • Total durable goods demand declined 0.5% in April, as forecast.
  • Bookings for non-military capital goods excluding aircraft advanced 1%, beating expectations.

Statistics:

  • GDP contraction: 0.7% (second estimate)
  • GDP growth: 0.2% (previous estimate)
  • Forecasted GDP decline: 1%
  • Chicago PMI: 46.2 (down 6.1 points)
  • Initial jobless claims: 282,000 (up 7,000)
  • Markit's flash services PMI: 56.4 (down 0.1 point from expectations)
  • Pending home sales index: 3.4% (April increase)
  • New home sales: 517K (rebounded 6.8%)
  • Total durable goods demand: -0.5% (April decline)
  • Non-military capital goods bookings: 1% (April increase)

Sources:

  • TheFlyOnTheWall.com via COMTEX

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