US stocks were mixed on Thursday ahead of earnings from the major large-cap tech stocks. After the closing bell, Apple, Amazon, Facebook, and Alphabet are scheduled to release financial results. Most sectors in the S&P 500 index were lower on Thursday led down by energy following a 5% decline in crude oil prices. Technology shares bucked the trend. US GDP tumbled declining nearly 33% year over year which weighed on the US 10-year yield. The yield closed below 55-basis points. US Jobless claims came out in line with expectations rising for the second consecutive week.
US Jobless Claims Rise for Second Consecutive Week
US jobless claims rose to 1.434 million, according to the Labor Department in line with expectations. This was the 19th straight week in which initial claims totaled at least 1 million and the second consecutive week in which initial claims rose after declining for 15 straight weeks.
Q2 GDP Contracts Sharply
Second-quarter GDP plunged the most in history contracting by 32.9% on a year over year basis according to the Commerce Department’s first reading on US growth. Economists had been looking for a drop of 34.7%, which means that despite the decline it was better than expected. With Q1 growth down 5% this number officially put the US economy in a recession. This news is not good for the incumbent President. No president in modern history has won reelection while there was a recession.
Personal consumption, subtracted 25% from the Q2 total, with services accounting for nearly all that drop. Prices for domestic purchases, known as the GDP deflator fell 1.5% for the period, compared with a 1.4% increase in the first quarter. The personal consumption expenditures price index dropped 1.9% after rising a tepid 1.3% in Q1. Excluding food and energy, the core PCE was off 1.1%.
This article was originally posted on FX Empire
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