Markets Tanking; Tomorrow’s 4th Quarter GDP Predicted Lower
The markets are tanking today for a lot of reasons (Update: Here’s the close: Dow down 415, S&P down 50, and NASDAQ down 97; good thing I didn’t pop the cork on that “NASDAQ 2500″ champagne yesterday. :–>).
One of those reasons is the belief that 4th quarter GDP to be reported tomorrow will come in way below January’s first estimate of 3.5%.
About two weeks ago, Biz Weak (link appears to be free for now) predicted a big downward revision from the original 3.5% reported in late January to reflect inventory clampdowns by businesses — perhaps to as low as 2.0%. That still seems like a stretch from here, especially since the employment numbers reported in January and February included significant upward revisions to 2006’s final months, and since Christmas season retail sales were pretty darn good but not great. One is tempted to ask if all of these new fourth-quarter employees were sitting around producing almost nothing.
But tomorrow will indeed tell the tale.
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UPDATE: This and this would seem to indicate that panic isn’t called for.
UPDATE 2: I would also suggest that the stock market news out of China (note: NOT Hong Kong) seems to be reflective of a mini- (and maybe more) Internet/Tech bubble. The hype around Chinese stocks with nothing there shouldn’t be overlooked. The point is that the attempt to build a “China is overvalued, therefore the US is too” seems pretty thin from here.
And I’m not in the mood for speculative market discussion, which is why comments (not pings) are turned off.
