Wall Street investors just traversed a gantlet: the busiest week of corporate quarterly results, fresh developments in global trade relations and a historic stock tumble by Facebook Inc. However, the headliner of this jam-packed week may be GDP, the official scorecard of the U.S. economy.
As one fixed-income strategist put it, never has a reading of gross domestic product held so much significance, with the three main equity benchmarks — the Dow Jones Industrial Average DJIA, +0.44% the S&P 500 index SPX, -0.30% and the Nasdaq Composite Index COMP, -1.01% — as well as the U.S. dollar DXY, +0.58% and Treasury TMUBMUSD10Y, +0.00% TMUBMUSD02Y, +0.15% markets primed for Friday’s highly anticipated print.
Here’s how Guy LeBas, head of fixed-income strategy for Janney Montgomery Scott, put it via Twitter on Thursday: “I can’t remember the last time the markets placed such importance on a #GDP number as they have with tomorrow. Given the perceived optimism, a miss could catch rates violently offside (i.e., rally risk),” he wrote.
I can't remember the last time the markets placed such importance on a #GDP number as they have with tomorrow. Given the perceived optimism, a miss could catch rates violently offside (i.e., rally risk).
— Guy LeBas (@lebas_janney) July 26, 2018
