First quarter GDP in the U.S. was revised downward from +0.2% to -0.7% this morning, and corporate profits for the same period fell 5.9% (the worst quarterly drop since 2008.)
Stocks opened lower in New York on the news, with a volatile dollar chopping above and below unchanged in early morning trading. Precious metals are also choppy, trading near unchanged. Crude oil was up over 1%.
Yesterday in the Markets
Markets were in a holding pattern on Thursday, with stocks, gold, and the dollar moving in a tight range.
Factors Affecting Gold Today
Today’s markets are brought to you by the word “volatility,” as the dollar, gold, oil, and stocks are very choppy in a fairly tight range this morning.
First Quarter GDP in the U.S. was slashed from initial estimates this morning, dropping from a +0.2% to -0.7%. Blame for the dismal numbers was spread around, with heavy snowfall, a higher dollar, and a strike at seaports along the West Coast all getting a share of the blame. Corporate profits plunged nearly 6% in the same timeframe, making this the worst quarter since 2008 for profits.
Chinese markets had a very volatile day, after dumping 6.5% of their value on Thursday. This bled over to European stocks, which were already on edge as the newest, “this time we really mean it” deadline in the Greek debt crisis looms.
Deutsche Bank now puts the odds of Greece leaving the EU at 70%. Greek citizens, wary of what happened in Cyprus when bank deposits were seized in a “bail-in” to pay off bank debts, are pulling their euros out of the banking system at a record rate. Over €7 billion in deposits were withdrawn from Greek banks in April, newly released records show. The Group of Seven (G7) leading industrialized nations are meeting in Dresden, Germany, where exasperation over the shenanigans and brinkmanship of the socialist government in Greece was evident.
Oil prices are being helped today after the Energy Information Agency reported crude stockpiles in the U.S. dropped by 2.8 million barrels. Levels are still near 80-year highs, however. Both WTI and Brent were up over $1 a barrel today.
The U.S. Mint announced that allocating (rationing) of 2015 American Silver Eagle bullion coins has ended. Sales figures slightly off last year’s all-time record have allowed the Mint to catch up to demand.
Purchasing Managers Indexes, which measure wholesale prices, are due out over the weekend and Monday for just about every major economy.
Watch also for developments in the Greek drama, as the EU stands tough against the leftist government in Athens, which wants more money to go towards their generous pension plans and social security.