Interpretation of the preliminary quarterly GDP rate of the second quarter of the US stock market: The Federal Reserve: "Although we cannot speak, we can use data to attack the theory of US economic recession"!
Let's look at the data first:
The preliminary annualized quarterly rate of real GDP in the second quarter of the United States, the previous value was 1.4%, the expected value was 2%, and the announced value was 2.8%
The preliminary quarterly rate of real personal consumption expenditure in the second quarter of the United States, the previous value was 1.5%, the expected value was 2%, and the announced value was 2.3%,
The preliminary annualized quarterly rate of the core PCE price index in the second quarter of the United States, the previous value was 3.7%, the expected value was 2.7%, and the announced value was 2.9%
Data interpretation:
The US economy maintained a stable and strong pace in the second quarter, while consumer spending increased, which brought greater encouragement to the economy and the demand side. At the same time, the core PCE price index in the second quarter fell, which was not as expected but was significantly lower. A strong economy, lower prices, increased consumption, good economic data, and favorable to inflation are the data conditions that the Federal Reserve wants most.
Data impact:
Good for the US economy, the US dollar index rose, and US bonds fell slightly. The declines of several major US stock indexes narrowed before the market, and technology stocks also narrowed. This data is more favorable to real enterprises such as Russell and Dow Jones. Tonight, Russell and Dow Jones may rebound and rise, and may also lead Nasdaq and S&P to close their losses.
If the Russell index rises, it proves that the investment sentiment of traders in the United States has warmed up, which has a positive effect on the crypto market. However, we have to wait for the reaction after the opening of the US stock market.
However, this data will bring certain pressure on inflation. If the core PCE on Friday does not exceed the previous value, then this data is good data for the September interest rate cut.
So far, the probability of a rate cut in September has risen from 80.3% before the data was released to 85.8%
The probability of a rate cut in July has dropped from 8.8% to 6.7%
Summary:
Although this week is the Fed's silent period, the market has been shorting the US economy due to the panic of the decline of US stocks, but the Fed has used an unexpected data to prove that at least the current US economic data is still stable and strong. The only breakthrough in the US economic recession is the labor market, and the others are self-defeating.
