U.S. GDP and Charts

Today, the Commerce Department will publish the initial estimate for second quarter GDP.  The consensus of forecasters is that growth will come in between 1.5% to 2% as an annual rate.  The economy grew 3.1% in Q1. It seems that government spending and military spending are strong and that looks to continue.  Consumer spending has been doing well and will be a key in terms of judging the overall health of the economy.

The ECB did not do much to give the market guidance and highlights the fact that with rates where they are there is perhaps not much more the ECB can do to help stimulate growth and there will be more focus on Germany and other large European countries,  using more money to get the economy going.

The GDP number today may give the Fed ammunition in terms of rate cutting next week on the 31st.  We still expect a .25% cut with a focus on the upcoming data to decide how many more cuts will be needed this year.  We think that many market participants are looking for .50%.

How we see the markets heading into the weekend:

S&P 500: 

                  Support 2,963, 2,908, 2,865

                  Resistance:  3,025

DAX Index:

                  Support  12,370, 12,225,

                  Resistance:  12,590, 12,850, 13,175

EU Stocks 50:

                  Support:  3,480, 3,430, 3,350

                  Resistance:  3,547, 3,575, 3,598

XAUUSD:

                  Support:  1402, 1380,

                  Resistance:  1433, 1445, 1455

EURUSD:

                  Support:  1.1130, 1.1100,

                  Resistance:  1,1180, 1.1235, 1.1250

EURNOK:

                  Support:  9.6250, 9.5980

                  Resistance:  9.6750, 9.7050, 9.7275

USDJPY:

                  Support:  108.13, 107.80

                  Resistance:  108.75, 109.15

The VIX futures contract which we follow closely to gauge market sentiment has come of the recent highs and a break above 16 would signal that global equities will trade lower.

Brent Crude has settled in at the $6350 level.  The range is $60.00 to $67.50.   Relatively calm given the geopolitical risks.

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