American stock markets recorded declines since the opening, and the source of sentiment was weak GDP data showing that the economic slowdown in the US in the first quarter was stronger than expected.
Increased volatility statement came after the US Federal Reserve (Fed), which expressed the hope that the causes of the slowdown are temporary.At the close the Dow Jones Industrial fell by 0.41 per cent., To 18035.53 points.
S & amp; P 500 lost 0.37 percent. and amounted to 2,106.85 points.
Nasdaq Comp. It fell by 0.63 per cent. and amounted to 5,023.64 points.
“The Fed did not say much, but estimated that a slowdown in the first quarter is temporary. It seems that the Fed does not care much deflation and is confident that it will reach its founding at the end of the year. I do not think, however, that the market expected more or less than what has been said “- says Mark Kępna of Themis Trading LLC.
The Fed said in a statement after their April meeting that he believed the slowdown in the US in the first quarter was partly due to temporary factors, and at the appropriately accommodative monetary policy, the economy can grow at a moderate pace.
“It is expected that inflation will remain at the current low level in the short term, but the committee expects that it will be gradually increased to a level of 2 percent. In the medium term” – written in the Fed’s statement.
On Wednesday the US Commerce Department reported the first calculation of US GDP in the first quarter.
US Gross Domestic Product in the first quarter of 2015 years rose by 0.2 percent. in terms of annualized qoq. Analysts had expected GDP growth in the first quarter of 2015 the 1.0 per cent. in terms of annualized qoq. The indicator will still be subject to two revisions: in May and June.
The growth rate was lower than in the fourth quarter of 2014, when US GDP increased by 2.2 percent. in terms of annualized qoq.
Economists estimate that include low oil prices and a strong dollar contributed to the weakening US exports and investments, which negatively affected the GDP growth in the first quarter. However, they expect improvement in the second quarter., When economic expansion will promote seasonal factors and an increase in private consumption.
There has been a decline in the index of mortgage loan applications MBA. Seasonally adjusted index zniżkował in the week ended 24 April by 2.3 percent. A week earlier, the index rose by 2.3 per cent., And compared to last year the ratio is now 33.7 per cent. higher.
The number of home sales contracts signed in March by the Americans, grew month-on-month by 1.1 percent. – Reported the National Association of realtors (National Association of Realtors). Analysts had expected that the number of contracts for the sale of houses will increase by 1.0 percent. month-to-month.
On Wednesday, investors know the following results of US companies.
Mastercard in the first quarter. 2015. Reported a profit of 89 cents per share, which is more than expected by the consensus of 80 cents, while revenues amounted to 2.23 billion dollars and turned out to be slightly lower than expected 2.28 billion dollars.
Time Warner announced a profit of $ 1.19 per share, about 10 cents more than the consensus.
Among the companies of the S & amp; P 500 that have already announced results, about 75 percent. It reported higher profits than analysts expected, but less than half – 48 percent. – Showed greater-than-expected sales.
“There are still reasons for concern,” – said Tim Dreiling of The Private Client Reserve of US Bank. “Equity markets laboriously move up due to generally weaker earnings” – he added, referring to too low a level to analysts’ expectations of profits of US corporations.
Economists and analysts blame for the unsatisfactory results of a burden on strong dollar, which is more expensive by over 12 percent. relative to the level prior to six months.
“Currency burden earnings in the quarter stronger than ever before” – said Lindsey Bell of the S & amp; P Capital IQ.
On Thursday the planned publication of results, among others, Colgate-Palmolive, ConocoPhillips, ExxonMobil, Virgin America, Western Union and Visa.
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