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Markets Sinks on Mixed GDP Data, Greece Still a Concern


Today's financial recap and tomorrow's financial outlook.

Markets were knocked down after revised GDP for the first quarter came out mixed today.

This morning, the second estimate of first-quarter GDP came in at -0.7%, which was slightly better than the -0.9% expected by economists. The first estimate in April showed a 0.2% gain.

But even though GDP was above consensus, personal consumption and core PCE numbers both missed expectations.

Additionally, the ISM Milwaukee and Chicago PMI reports were weak. On the plus side, consumer sentiment beat Wall Street estimates.

The weak-leaning data pushed the 10-year US Treasury yield down 1.4 bps to 2.121%, sending bond prices higher.

While the Fed has made clear it plans on raising rates this year, it remains data dependent and the recent streak of sluggish data could make it more dovish.

Stocks sold off, and the S&P 500 fell 0.6%.

The Baker Hughes US oil rig count fell for the 25-straight week, contributing to a 4.4% rally in crude oil.

The rise in oil prices gave transports a hard time today. The iShares Transportation Average ETF (IYT) fell 0.7%

Altera (ALTR) rallied 4.0% as once again, chatter of an acquisition by Intel (INTC) surfaced. News reports indicated that Intel may buy Altera for $54 per share, a 15% premium to yesterday's closing price. Back in April, Intel made an unsolicited offer of $54 per share, which Altera rejected.

Heron Therapeutics (HRTX) enjoyed a strong rally today and closed up 60.0% after it announced positive results for its Phase 3 Magic study of Sustol.

Health Insurer Humana (HUM) rallied 5.0% on rumors that the company is up for sale. Merck (MRK) rose 2.0% after it announced positive results for a cancer treatment.

Greece is back in the news as its June 6 IMF payment date nears. Greek officials are claiming that that they're close to a deal with their creditors, but ECB officials are saying the opposite. An article by Bloomberg stated that deposit withdrawals from Greek lenders are increasing as fears about Greece's future continue.

Monday's Financial Outlook

US economic data for Monday will include personal income and spending, PCE deflator , Markit US manufacturing PMI, construction spending, and ISM manufacturing numbers.

Overseas, we will see Japan's Merchandise Trade Balance on Sunday, and New Zealand's Trade Balance on Monday.

There will be one major earnings release on Monday after the close in PVH (PVH).
No positions in stocks mentioned.
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