NOTE: The Morning Minutes will not be issued Thursday or Friday, they will return on Monday May 5th.
Concern that the tariff war could push the US and other countries into a recession has deepened this morning after it came out that the US economy turned negative over the winter. US Q1 GDP was quite disappointing (-0.3% vs street 0.4% and previous 2.4%), and the negative quarter puts it halfway to a textbook recession (two quarters in a row of negative GDP).
ADP payrolls came in below expectations for the second time in three months, and last month’s report was revised downward to 147K from 155K). Canada February GDP (-0.2% vs street 0.0% and previous 0.4%) confirmed the North American economy has slowed significantly.
US index futures had been sliding through the morning but selling has accelerated since the disappointing data came out. Currently futures are down 0.9%-1.9% with NASDAQ futures leading the way lower. European markets have also turned downward with the FTSE and Dax both falling 0.2%.
Commodities are getting crushed this morning on concerns demand for resources could weaken. Copper is down 6.3%, while Crude Oil is down 1.4%. The US 10-year treasury note yield has started to decline as well, sliding toward 4.20%. The US Dollar is up 0.1% against the Loonie and Euro, 0.4% against the Pound, 0.6% against Gold and 0.9% against Bitcoin.
There are a number of economic reports due over the rest of today and the rest of the week. US Chicago PMI (street 45.5) is due at 9:45 am EDT. President Trump is speaking at 4:00 pm EDT. Tomorrow brings Manufacturing PMI reports from around the world and a big week wraps up on Friday with US Nonfarm Payrolls.
Starbucks is down 9.4% premarket after disappointing on earnings. Visa, Caterpillar, and Booking Holdings all beat expectations. After the close today, Microsoft, Meta Platforms and Canadian Pacific report results. Apple, Amazon.com, Exxon Mobil and Chevron report later in the week.