First quarter GDP of 2.3% beat consensus of 1.8%, which is the first time that’s happened in the first quarter since 2008.  The number was well above the average 1.6% GDP from 2009 – 2017. 

• Personal Income +$182.1 billion
• Personal taxes -$40.1 billion
• Disposable Income +$222.1 billion
• Personal Savings rate 3.1% from 2.6% in fourth quarter

The PCE price index increased 2.8%, the same increase as in the fourth quarter. Excluding food and energy prices, the PCE price index increased 2.5% compared with an increase of 1.9% in the fourth quarter.

The University of Michigan Consumer Sentiment Index for the second half of April was 98.8 versus 97.8 in the mid-month, however it was down from the final reading of 101.4 for March. Trade worries and rising rates were major contributors to the decline, while tax reform had positive impacts.  The data suggest that consumption should grow at a rate 2.7% for mid-2018 to mid-2019. 

• Current Economic Conditions Index declined to 115 from 121.2
• The Index of Consumer Expectations dropped to 86.8 from 88.8

After the sentiment was released, stocks turned lower, perhaps off comments from respondents to the survey that the current state of the economy is “as good as it gets.”

The rotation has equity indexes treading water today.  We are seeing some of the stocks that took drubbings yesterday catch a bid today as bottom fishers step into oversold areas.  Yesterday’s winners are seeing profit taking as rotation continues.  The Nasdaq, which was up 1.64% yesterday, opened strong this morning (1.10% higher), and is now flat as technology has reversed despite blow out earnings from tech giant Amazon.   

Today’s leadership group is utilities as the yield on the 10-year treasury has dropped back below the psychological important 3.0% (the 10-year has not been able to break above the 3.03%). The S&P Utility Fund, XLU, is up 1.30% and the 10-year yield is 2.96%.   

WTI is current up slightly to $68.22 after the Baker Hughes rig count shows that 5 U.S. oil rigs were added taking the count to 825 rigs, up 125 year-over-year.  This is the 4^th consecutive week of increases. 

The major indices are currently all in the green but hovering close to the flat line.  Advancers outpace decliners 1662/1199 on the NYSE, while decliners have the lead the Nasdaq 1276/1187. 

Have a great weekend.