Nasdaq, S&P, Dow futures hold gains despite GDP -1.4%

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Stock index futures still point to a higher open Thursday with investors mostly shrugging off surprise contraction in first-quarter GDP, pegging it on a drag from trade and inventories.

GDP fell 1.4%, according to the advance figures, well shy of the 1.1% annual growth rate economists expected.

“When we strip it down to private domestic demand growth it was actually a pretty strong number,” Deutsche Bank chief economist Matt Luzzetti said on Bloomberg TV.

Nasdaq 100 futures (NDX:IND) +1.7% and S&P futures (SPX) +1.3% are off their highs but still solidly higher. Meta is helping, up 16% premarket, with digital ad names also rising, after solid profit and user numbers. Dow futures (INDU) +0.7% are also gaining.

Treasury yields are moving higher, even with the weak growth numbers. The 10-year yield is up 4 basis points to 2.86% and the 2-year is up 6 basis points at 2.64%.

“This is not the start of a recession,” Pantheon Macro’s Ian Shepherdson said before the numbers came out. “The weakness in GDP growth was due to wild components.”

“The US growth story, rather than decimal point details, is what matters,” UBS’ Paul Donovan said. “US domestic demand is still normalizing after the exceptional year of 2021. With pandemic-era savings already spent by lower-income households, consumer spending should be closer to pre-pandemic norms – though still supported by labor market strength.”

See the stocks making the biggest moves this morning.