There was no question the economy is soft, but the advance release of the first quarter of the U.S. Gross Domestic Product (GDP) hit like a punch to the gut. The headline number of 0.2% is simply demoralizing and it has been in freefall since the third quarter of last year.

However, the number would have been much higher if it was not for the private inventory build of $100 billion to go with $80 billion in the third quarter and $82 billion in the second quarter.

Will consumers buy all this stuff? Personal savings surged to 5.5% from 4.6% in the fourth quarter and 4.9% a year earlier. The most recent consumer confidence number from the Conference Board was an unmitigated disaster. What's driving the swift mood changes that see months of steady, but cautious improvements wiped out in a second?

The news set the tone for the Federal Reserve, which issued a statement that actually mitigated the carnage that saw the Dow off 156 points. Coming into the session, the consensus was 96% for a hike in September. I think 2015 can officially be taken off the table.

Even though the market stopped moving lower as the Fed rate hike is now pushed out, investors have to be concerned if there is any way to pump an economy that’s deliberately held back from higher taxes and the administration’s war on business.

Greenback Stumbling

The strong dollar has crushed corporate earnings. Thus far, it hasn’t sparked extra spending or any enthusiasm from Main Street. After forming a recent double top, the U.S. Dollar Index (USDX) is now tumbling hard and broke through its 50- day moving average. The rapid decline of the dollar without the aid of central bank assistance is worrisome. Let's face it, the economy is just barely moving along. The assumptions of a miraculous second half-rebound are being tempered.

For me, it's simply frustrating because we have the most amazing businesses in the world, best practices, and an opportunity to take global shares since rival nations can only compete on money-printing gimmicks.

Moreover, there is a serious attempt to alter our DNA, and while it's not working; it has created hesitation and pauses that's resulted in the most morbid recovery.

Today’s Session

Equity futures aren't off much, but internal carnage continues as names that miss aren't getting free passes and those that offer sub-par guidance are simply being crushed. The great news is these knee-jerk reactions are creating amazing buying opportunities.

There are a  few winners in the earnings circus, including Exxon Mobile which blew away consensus and maybe the notion that the American oil miracle was dead.

Company	Date	EPS	Consensus	Revenue ($M)	FY EPS Guidance	FY EPS Consensus
CAH	30-Apr	1.19	B 0.03	25,375	-	4.36
CL	30-Apr	0.66	in-line	4,070	-	2.95
DRQ	30-Apr	1.38	B 0.23	226	4.60-4.80	4.78
XOM	30-Apr	1.17	B 0.34	67,618	-	3.78
THRM	30-Apr	0.55	B 0.02	207	-	2.24
HEES	30-Apr	0.17	M 0.05	227	-	1.60
HAR	30-Apr	1.22	M 0.05	1,464	5.65	5.84
MOS	30-Apr	0.70	M 0.05	2,139	-	4.31
ODFL	30-Apr	0.73	B 0.02	696	-	3.64
POT	30-Apr	0.44	M 0.05	1,665	1.75-2.05	2.02
TASR	30-Apr	0.13	B 0.07	45	-	0.41
TEVA	30-Apr	1.36	B 0.10	4,982	5.05-5.35	5.14
VIAB	30-Apr	1.16	B 0.09	3,078	-	5.90

Of course, the spike in crude might have already belied the call for $30 West Texas Intermediate.

Economic data is mixed as well with initial jobless claims down to 262,000 from 296,000 a number that suggest these should be boom times.

In March, spending increased, although less than expected, and at the expense of savings which edged lower to 5.3% from 5.7% because incomes were unchanged.

There are lots of storylines this morning. These are the moments for taught out decisions which are different than knee-jerk decisions. It can be a buy, sell or hold for existing positions or keeping the powder dry to keep cash on sidelines.

Comments

If you run a business this announcement was confirmation after the fact. I knew we were in trouble by the 3rd week of January. The freezing of consumer spending and consequently of business growth comes down to predictability. The current administration has created a climate where people are afraid. Under such condition it is better to stick money in the sock drawer that spend it. If 2016 does not provide a visionary candidate on a par with the Reagan campaign of the late 70's look for this behavior to continue. Scott Manhart on 4/30/2015 10:22:40 AM

The Obama economic recovery really sucks. The Kool-Aid drinkers like to point out that Obama inherited the worst economy since the great depression. This is bunk! By making that claim, the Kool-Aid drinkers set us up to believe Obama had to move mountains to accomplish anything. In actuality, Obama inherited the worst economy since Jimmy Carter. Here is what Ronald Reagan inherited from Jimmy Carter: Inflation - 13.5%, Unemployment Rate: 7.9%, Prime Rate 13%. Here is what Barak Obama inherited from George W. Bush: Inflation - 4.2%, Unemployment Rate: 6.5%, Prime Rate 4.5%. Hardly the worst economy since the great depression. With this weeks first quarter growth report, the Obama economy has grown 13.4% since the second quarter of 2009. At the same point in the G.W. Bush economy, growth was 16.5%, despite the tragedy of 9/11/2001. Ronald Reagan made difficult decisions to reduce inflation and had virtually no growth two years into his presidency. Despite this, economic growth at this point in his presidency was 20.5%. What does all this mean? The incremental GDP growth of the G.W. Bush economy would have been $540 Billion while at the rate of Ronald Reagan it would have been $1.25 Trillion. If job creation followed the same percentages, there would be 4.5 million jobs under G.W. Bush and 10.5 million jobs under Ronald Reagan. Kool-Aid drinkers would blame the housing crisis on G.W. Bush and the big banks. In reality, the housing crisis pre-dated G.W. Bush. Ninja (no income, no job) and liar loans, low-doc and no-doc loans were pushed by Bill Clinton and Andrew Cuomo, his housing secretary. They were aided by Fannie Mae and Freddie Mac and mortgage brokers like Countrywide Financial. The housing crisis and recession it caused may have occurred on G.W. Bush's watch, but it had its roots in Democrat policies. Chris Reinhardt on 4/30/2015 11:59:17 AM

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