Both the Dow Jones and dollar failed to fall for the surface level success of a surprisingly strong US GDP reading, investors instead looking beyond the headline number.
At an annualised rate of 3.2%, the first look Q1 group data was way above what the US managed in the fourth quarter, and what was expected, with both of those numbers standing at 2.2%. However, analysts were quick to flag up a few potentially troublesome details in the report. Consumer spending fell to just 1.2%, with residential construction contracting for a fifth consecutive quarter; inventory stockpiling, meanwhile, added a chunky 0.65% to the overall growth rate, something that could come to bite the country in the behind in Q2.
All this meant the dollar actually retreated after the figures were released, shedding 0.3% against the pound and 0.4% against the dollar. As for the Dow, it held steady with a 0.1% decline, unable to recover Thursday’s 3M-led losses.
Elsewhere, the FTSE couldn’t shake its 0.2% slide, though was lucky it didn’t see a return to the more sizeable slump seen at the start of the session given BP (LON:BP) and Shell’s performance worsened as Brent Crude fell 3%. The DAX eked out a 0.2% increase thanks to Deutsche Bank (DE:DBKGn) easing its losses, with the CAC up 0.3%.
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