U.S. stocks paused as expected today ahead of tomorrow’s initial report on growth in U.S. GDP for the second quarter. Economists surveyed by Briefing.com are expecting that GDP growth dipped to 1.8% year over year in the quarter, down from 3.1% in the first quarter.
All 11 industry sectors in the S&P 500 closed lower a day after the index closed at an all-time high. The Standard & Poor’s 500 fell 0.55% on the day and the Dow Jones Industrial Average pulled back by 0.47%. The NASDAQ Composite Index dropped 1.0% and the Russell 2000 was lower by 1.2%.
But there’s more here today that a pull back on uncertainty before a big influential report. The market keeps getting messages that say the global economy is slowing and that has led to some questioning of the Goldilocks rally. Perhaps–just perhaps–growth is slowing so much that an interest rate cut or two or three from the Federal Reserve won’t be enough to power stocks higher from record levels.
Today’s worrying growth news came from the European Union, where departing European Central Bank president Mario Draghi said that the European economy was weak enough to call for more stimulus from the bank.
And it included earnings and revenue misses from industrial bellwether stocks such as Caterpillar (CAT) and Boeing (BA). Earnings results so far this quarter have generally been slightly better than expected but guidance for the rest of the year has been weaker with companies frequently putting off the date of sector improvements from the second half into 2020.
The U.S. crude benchmark West Texas Intermediate climbed 0.09% today to $55.93 a barrel. International crude benchmark Brent dipped 0.11% to $63.11 a barrel.
Gold was down 0.68% to $1426 an ounce.
The yield on the 10-year Treasury rose 4 basis points to 2.08% and the yield on the two-year Treasury held at 1.87%.