{"id":1961,"date":"2023-04-29T09:09:29","date_gmt":"2023-04-29T13:09:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/consumer-spending-drove-the-economy-in-the-first-quarter\/"},"modified":"2023-04-29T09:09:30","modified_gmt":"2023-04-29T13:09:30","slug":"consumer-spending-drove-the-economy-in-the-first-quarter","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=1961","title":{"rendered":"Consumer Spending Drove the Economy in the First Quarter"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"SB52095737389748693536704589583272842150790\">\n<p><em>This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron&#8217;s.<\/em><\/p>\n<h6>GDP\u2019s Mixed Signals<\/h6>\n<p>Daily Insights<\/p>\n<p>BCA Research<br \/><strong>April 28: <\/strong>The advance gross-domestic-product estimate showed a slowdown in the pace of U.S. economic growth from 2.6% to 1.1% in first-quarter 2023, below expectations of 1.9%. However, the details of the report painted a mixed picture of economic conditions.<\/p>\n<div class=\"paywall\">\n<p>On the one hand, consumption growth accelerated sharply from 1.0% to 3.7%, albeit slightly weaker than consensus estimates calling for a 4.0% increase. A pickup in spending on both goods (which increased by 6.5% following a 0.1% decline) and services (which rose by 2.3% following 1.6%) contributed to this dynamic. <\/p>\n<p>Moreover, final sales to private domestic purchasers, which strips out the misleading components of inventories and imports and therefore is a good indicator of underlying growth, increased by 2.9% following 0% growth in the final quarter of 2022. <\/p>\n<p>On the other hand, nonresidential fixed investment growth slowed sharply from 4.0% to 0.7%. Moreover, a 4.2% contraction in residential fixed investment (the eighth consecutive quarterly decrease) and a decline in private inventory investment had a negative impact on GDP, partially offsetting the positive contribution from increased consumption.<\/p>\n<p>Rouyaka Ibramhim<\/p>\n<h6>Real Estate Distress<\/h6>\n<p>Market Commentary<\/p>\n<p>Cresset<br \/><strong>April 27: <\/strong> The commercial real estate sector is already feeling the impact of two converging trends: tighter liquidity and weaker fundamentals. The Covid lockdown altered the way Americans work and spend, particularly in metropolitan areas. <\/p>\n<p>At the same time, small and midsize banks have reduced the availability of credit, particularly for commercial real estate. The proliferation of remote work has had a profound impact on the office sector and on supporting real estate in the downtown business districts, like retail and convention hotels. <\/p>\n<p>We believe that fundamentals in the office market will bifurcate as tenants upgrade their office space, leaving class \u201cA\u201d product fully occupied and class \u201cB\u201d and below bearing the brunt of vacancies&#8230;.<\/p>\n<p>The segment of CRE most vulnerable to retrenchment in the banking sector would be smaller, local projects with loan values below $20 million, including multifamily, retail, office, and hotel, whose loan balances are too small for money-center banks, and whose loans don\u2019t qualify for inclusion in commercial mortgage-backed securities. Distress will emerge among recently originated, highly leveraged projects whose loans need to be refinanced. We anticipate a swath of insolvency creating rescue opportunities at attractive capitalization rates for equity buyers over the next 12 to 18 months.<\/p>\n<p>Jack Ablin<\/p>\n<h6>Gold Wrestles with $2,000<\/h6>\n<p>The Weekly Speculator<\/p>\n<p>Marketfield Asset Management<br \/><strong>April 27: <\/strong>Gold continues to dance around the $2,000 level but hasn\u2019t yet been able to take the decisive step through this level to challenge its all-time high. [Last] week saw gold top $2,012 on Thursday, then fall back to $1,971 on Friday morning before hitting $2,009 on Wednesday morning and then dropping back to close at $1989.22. Meanwhile support at the 50-day moving average has moved up to $1,927 and should start to become a factor in short-term prices over the next couple of weeks. We still view the environment as bullish for gold, but the metal needs to take advantage of this to bring sufficient new capital into the market to establish a durable foothold above $2,000.<\/p>\n<p>Michael Shaoul, Timothy Brackett<\/p>\n<h6>Bear-Market Finale<\/h6>\n<p>Equity and Derivatives Strategy<\/p>\n<p>Evercore ISI<br \/><strong>April 25: <\/strong>While a line of thought goes \u201cthe market may have already bottomed in October, given that this is the most anticipated recession of all time,\u201d we think that \u201cit isn\u2019t different this time.\u201d No bear market has ever ended before the recession began, and no bear market has ended without a cathartic volatility spike. In this respect, 2011 is a blueprint for the likely stock market path to a second-half 2023 bear-market finale and the start of a multiyear buy-and-hold bull market.<\/p>\n<p>Julian Emanuel, Michael Chu, Barak Hurvitz<\/p>\n<h6>Too Dependent on the Fed<\/h6>\n<p>The passage below is excerpted from Robinson Value Management\u2019s first-quarter letter.<\/p>\n<p><strong>April 25: <\/strong>Recent innovations in monetary policy such as the \u201cfacilities\u201d announced after each [bank] blowup appear to fall short of the benign goal of lasting stability. Most unsettling is the Federal Reserve\u2019s growing inability to reduce\/normalize its balance sheet without another financial crisis erupting. The economy and markets are addicted to the Fed\u2019s elixir, always needing more. To avoid bad outcomes, the Fed accommodates (what else can a committee do?) but the direction doesn\u2019t feel good.<\/p>\n<p>Amy Abbey Robinson, Charles W. Robinson III<\/p>\n<h6>Broker\/Dealer Stocks<\/h6>\n<p>Momentum Strategies Report<\/p>\n<p>Clif Droke Market Analysis<br \/><strong>April 25: <\/strong>One of my favorite leading indicators, the broker\/dealer stocks, are hanging tough despite an uncertain financial- sector outlook (in view of First Republic). The NYSE Securities Broker\/Dealer Index (ticker: XBD) is also within reach of its 50-day moving average and could manage to pierce above this trend line with a relatively small effort. Consequently, I\u2019d view a breakout above the 50-day line in XBD as bullish\u2014especially if it accompanies an upside break in the<br \/>\n        Financial Select Sector SPDR<br \/>\n       exchange-traded fund (XLF).<\/p>\n<p>Clif Droke<\/p>\n<p>To be considered for this section, material, with the author&#8217;s name and address, should be sent to MarketWatch@barrons.com.<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/consumer-spending-drove-the-economy-in-the-first-quarter-ddfafa3c?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron&#8217;s. GDP\u2019s Mixed Signals Daily Insights BCA ResearchApril 28: The advance gross-domestic-product estimate showed a slowdown in the pace of U.S. economic growth from 2.6% to 1.1% in first-quarter 2023, below expectations of 1.9%. However, the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1962,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-1961","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consumer Spending Drove the Economy in the First Quarter | iFintechWorld<\/title>\n<meta name=\"description\" content=\"This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron&#039;s.GDP\u2019s Mixed Signals\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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