Stocks were higher after a positive GDP report with the Dow moving up 69 points to close at 20,728 on volume that was a tad lower than the prior day. Banks rebounded as speeches by various Federal Reserve members indicate 2 or more rate hikes could happen in 2017.
First Trust’s top economist and honorary member of the WPM (Westport Mafia), Brian Wesbury, commented on today’s release of the latest US GDP growth estimates. The real GDP was revised up to 2.1% from an estimate of 1.9% thanks to an upward revision in consumer spending. Brian also noted that today’s report was the first look at Q4 corporate earnings and these were up an encouraging 0.5% compared to Q3 and 9.3% YOY. The numbers, while good, would have been even higher but the VW emissions scandal and subsequent penalty reduced overall profits by about $5 billion. Still the GDP reading was good.
Here in the “soggy terrarium” known as Seattle, Amazon has officially opened its drive through grocery store in Ballard. Meanwhile Amazon announced it was closing its Quidsi unit which is the parent company of sites like Diaper.com and Soap.com. This will result in 236 jobs being lost but I am sure these folks will find work in other parts of the company. One thing for sure is that even in failure, Amazon learns from mistakes and never gets rid of the data which it applies to other projects going forward. One stock analyst commented on this when he said that Amazon is one of the few big companies that remarkably continues to grow at 20% per year.
Oil was up on news that US stockpiles grew less than expected coupled with indications of unity within OPEC. At the end of the day WTI crude was up 1.7% to $50.36 per barrel.