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Economic Highlights

December 20: GDP Numbers Better Than Expected

 ZacksTrade Now

The favorable tone of this morning’s economic releases this morning will likely do nothing more than give us a positive start at the open, as the market’s primary preoccupation will remain the ‘Fiscal Cliff’ situation. And on that front, both sides are locked in tactical maneuvers that stop us from getting a quick fix. The expectation in the market all along has been that a deal will come through, but increasingly  appears that it will literally be a last-minute deal.

On the data front, the weekly Jobless Claims numbers came in as expected while the last read on the third quarter GDP showed a bigger than expected positive revision. Jobless Claims reversed the prior week’s strong gains, increasing 17K to 361K.  The four-week average, which smoothes out the week-to-week volatility, dropped by 13.8K to 367.8K. The claims data has now shaken off the Sandy effects and are now at pre-storm levels, though it does to be relatively erratic at this time of the year. The final GDP revision is typically not much of a market mover and this morning’s bigger than expected positive revision (to 3.1% from 2.7%) will likely be no different. As welcome as this positive revision, it is nothing more than setting the record straight. Growth expectations for the current quarter, which have steadily been coming down in recent weeks, are not expected to change because of today’s report.

In corporate news, we got an earnings miss from Discover Financial (DFS) this morning, while ConAgra (CAG) and KB Homes (KBH) came ahead of expectations. In other news, NYSE Euronext (NYX), the owner of New York Stock Exchange is getting sold to the IntercontinentalExchange (ICE) for $8.2 billion, after having rejected bids from them in the past.

Existing Home Sales are scheduled for release today at 10:00 AM EST. Our consensus estimate shows this indicator is expected to increase to 4.88 million from the annual pace of 4.79 million reported in October.

 

 

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