U.S. In-Recession: An Alert
U.S. GDP in the 1st quarter reported this morning at just 1.6% vs the average trade estimate of 2.4%. This is seen as a significant slowdown in the U.S. economy.
Stock markets may be at just the beginning of an extended bear market. The Dow Jones after surging above 40,000 points, now has 1st key support at 36,000 points.
A LOOK AT THE DOW JONES OVER THE PAST THREE (3) MONTHS. 1ST KEY SUPPORT AT 36,000 POINTS REFLECTING A 10% PULLBACK FROM RECENT ALL-TIME HIGHS. EXTENDED EQUITY BEAR MARKET NOW POSSIBLE.
The U.S. Federal Reserve may have to make a rate cut shortly despite all the grandstanding of a buoyant U.S. economy. This is simply not the current situation. Layoffs are now all encompassing in many economic sectors stateside.
The Bank of Canada is now highly likely to cut rates 1/4% in June. This may be the beginning of a series of rate cuts. Stay tuned to Errol’s Commodity Wire, Calgary.
To place into perspective, U.S. economic growth has effectively been cut by more than 50% from the Q4 GDP of 3.4%. This is also 50% lower than Goldman Sachs estimates.