T3's Take 3: Economic Data Misses Across the Board
Today's financial recap and tomorrow's financial outlook.
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On Thursday, the Fed took on a more hawkish than expected tone, which put a December interest rate hike back on the table in many trader's minds.
However, weaker-than-expected economic data raised questions about the strength of the US economy.
Third-quarter GDP rose by 1.5%, missing the 1.6% consensus.
Additonally, personal consumption, GDP Price Index, and pending home sales numbers came in below expectations.
Tomorrow, the PCE deflator, which is the Fed's prefered inflation indicator, will be released. The Fed, like other major central banks, has struggled to stoke inflation so traders will be eager to see if anything has changed.
As detailed below, several other major US economic releases are on tap for tomorrow.
Stocks grinded someways, digesting yesterday's big post-FOMC gains.
The S&P 500 was flat, while the NASDAQ composite fell 0.4%, and each traded in extremely tight range.
The small-cap Russell 2000 showed significant underperformance, though to be fair, it outperformed the S&P by more than 2:1 on Thursday.
Financial stocks also saw profit-taking, while energy and transportation stocks rallied.
Biotechnology stocks fell sharply off morning highs. The NASDAQ Biotechnology Index ETF (IBB) hit a morning high of $338.89, putting it up 1.5%, but it dropped down to close at $328.55, down 1.0% on the day.
Index leader Apple (AAPL) resumed its rally today with a 1.1% gain, seemingly inspired by the solid results at key supplier Cirrus Logic (CRUS).
GoPro Sinks on Earnings
Action camera maker fell 15.2% to $25.62 today after releasing third-quarter earnings. The company reported a profit of 25 cents a share, missing by 4 cents. Revenue was also below expectations.
GoPro expects fourth-quarter revenues of $500-$550 million, which is well under the $677 million analyst consensus.
GoPro suffered from a poor rollout of the new Hero 4 camera, which required an early price cut.
Several Wall Street firms downgraded the stock and/or reduced earnings estimates.
According to Bloomberg, analyst now expect GoPro to earn $1.77 a share in 2016, down from $1.95 yesterday.
Ambarella (AMBA), which is a key GoPro chip supplier, fell 10.8% in sympathy.
Friday's Financial Outlook
Friday will be a very busy day for economic data, with a large number of reports including the Employment Cost Index, Personal Income & Spending, PCE Deflator, and University of Michigan Sentiment.
Overseas, Euro-Zone CPI and unemployment, and Canadian GDP numbers will be released.
Chevron (CVX), Exxon Mobil (XOM), and CVS Health (CVS) report earnings before the open.
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