Wall Street Lunch: Here Comes The Stagflation Debate

seekingalpha04-26

U.S. Q1 GDP fell to an annual pace of 1.6%, lower than expected, while the core PCE price index rose 3.7%.Southwest Airlines posts a slightly wider loss; Altria’s revenue fell 2.5% Y/Y.Check out Baird...

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Altria’s revenue fell 2.5% Y/Y.Check out Baird...</p>\n\n<a href=\"https://seekingalpha.com/article/4686173-wall-street-lunch-us-gdp-slowing\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0128525689.USD","symbol_name":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4686173-wall-street-lunch-us-gdp-slowing","article_id":"2430723913","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1440756095/image_1440756095.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2430723913","pubTimestamp":1714062240,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"U.S. Q1 GDP fell to an annual pace of 1.6%, lower than expected, while the core PCE price index rose 3.7%.Southwest Airlines posts a slightly wider loss; Altria’s revenue fell 2.5% Y/Y.Check out Baird picks within the financial technology, payments, and services subsector.   sasirin pamai Listen below or on the go on Apple Podcasts and Spotify","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","HAS":"孩之宝","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","KMB":"金佰利","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","UCO":"二倍做多彭博原油ETF","META":"Meta Platforms","SG9999015341.SGD":"United Income Focus Trust Acc SGD-H","LUV":"西南航空","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","BK4592":"伊斯兰概念","GPN":"环汇有限公司","SG9999001440.SGD":"United Global Dividend Equity Fund A SGD Dist","BK4018":"居家用品","BK4008":"航空公司","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","BK4075":"烟草","SCO":"二倍做空彭博原油指数ETF","TOST":"Toast, Inc.","BK4227":"交易和支付处理服务","XOM":"埃克森美孚","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","MO":"奥驰亚","USO":"美国原油ETF","LU0912757837.SGD":"JPMorgan Investment Funds - Global Income A (mth) SGD-H","HAS.AU":"Hastings Rare Metals Ltd","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","LU0056508442.USD":"贝莱德世界科技基金A2","GB00B4LPDJ14.GBP":"FUNDSMITH EQUITY \"R\" (GBP) ACC"},"translate_title":"华尔街午餐：滞胀辩论来了","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"XOM":1,"TOST":1,"MO":1,"META":1,"LUV":1,"KMB":1,"HAS.AU":1,"GPN":1,"USO":1,"HAS":1,"US6M.BOND":0.9,"US10Y.BOND":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"US7Y.BOND":0.9,"US912796CX52.BOND":0.6,"US912797FH58.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797HG57.BOND":0.6,"US912797HH31.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"SCO":0.6,"UCO":0.6},"content_text":"U.S. Q1 GDP fell to an annual pace of 1.6%, lower than expected, while the core PCE price index rose 3.7%.Southwest Airlines posts a slightly wider loss; Altria’s revenue fell 2.5% Y/Y.Check out Baird picks within the financial technology, payments, and services subsector.   sasirin pamai Listen below or on the go on Apple Podcasts and Spotify \n\n\n\n\n\n\n\n\nGDP +1.6%, the slowest pace in 2 years, as inflation came in hot. (0:16) Wall Street rushes to defend Meta stock. (3:33) Biggest oil ETF sees biggest outflows ever. (4:42) This is an abridged transcript of the podcast. Here comes the stagflation debate. The first look at Q1 GDP showed economic growth at its slowest pace in nearly two years. But the measure of inflation came in hotter than forecasts. First, the numbers. GDP fell to an annual pace of 1.6%, the lowest level since the second quarter of 2022. That’s well shy of consensus estimates that ranged from around 2.3% to 2.5%, down from the 3.4% rate seen in Q4 2023. The core PCE price index, which you’ll know as the Fed’s preferred inflation gauge, rose 3.7% for the quarter, topping expectations for 3.4% and up from 2% in the previous quarter. Slow or anemic growth with high prices is the definition of stagflation–and the markets certainly seemed concerned about that based on action after the print. Stock futures sold off sharply on concerns that economic activity is much weaker than anticipated. Bonds also sold off on the possibility that the inflation figures would spook the Fed. But strategists and economists are ready to break out the S-word after just one report and say there’s more to the story behind the headline figures. Pantheon Macro economist Ian Shepherdson says quite simply: “You're going to be hearing a lot about stagflation for the rest of today. Ignore it.” He says the downshift in growth isn’t a blip, but that inflation will cool in Q2. Defending growth, economist Ernie Tedeschi notes that the weak GDP number appears “to be driven by weakness in volatile components, especially net exports. Private domestic final purchases—the ‘core GDP’ made up of consumption and fixed investment—grew 3.1%, a very strong print.” As for market expectations on Fed action, the GDP report wiped out the very small chances that the FOMC would actually hike again this year. But traders are still looking for a first cut in September with a coin toss for another in December. Guy LeBas, strategist at Janney, says: “In terms of policy, there's nothing in here that changes 2024's narrative of fairly solid consumer, slightly elevated price pressures, and no imminent need for cuts.” In other earnings and active stocks Southwest Airlines (LUV) slumped after posting a slightly wider loss than anticipated in Q1. CEO Bob Jordan said, \"While it is disappointing to incur a first quarter loss, we exited the quarter with healthy profits and margins in the month of March. While costs remain a headwind, we are realizing benefits from our ongoing cost reduction actions and remain focused on enhancing productivity and controlling discretionary spending.\" Altria’s (MO) quarterly revenue fell 2.5% year-over-year to $5.58 billion. The drop was primarily driven by lower net revenues in the smokeable products segment, partially offset by higher revenue in the oral tobacco products segment and the all-other category. But looking ahead, Altria reaffirmed its 2024 full-year adjusted diluted EPS guidance range of $5.05 to $5.17, representing a growth rate of 2% to 4.5% from a base of $4.95 in 2023. The midpoint of the guidance range is ahead of the consensus estimate of $5.11. And Wall Street analysts came to the defense of Meta (META) and Mark Zuckerberg. Mizuho says the long-term fundamentals are \"unchanged.\" Bank of America said the momentum cycle for the stock is \"likely over,\" but the company is investing in the \"right places.\" JMP Securities said Meta is likely to be \"well positioned\" to benefit from AI's increasing engagement and advertising efficiency. RBC Capital said they would be buying the stock as AI only expands the company's moat versus its peers. Jefferies said it believes in the company's successful track record of generating \"meaningful\" returns in past investment cycles. In other news of note Greenlight Capital’s David Einhorn says Eastern demand for buying gold (XAUUSD:CUR) has kept prices higher. In a letter to investors, the hedge fund manager said that there has been a secular trend of Eastern investors buying gold from the West, and “perhaps the West is running out of gold to sell, and Eastern demand has remained strong enough to force the price higher.” Einhorn said the rise of 8% in gold in Q1 was surprising because typical moves in currencies and interest rates would have produced a weaker quarter. But he says \"it’s possible, the advance was related to the market beginning to doubt the sustainability and wisdom of both monetary and fiscal policies.\" Also in commodities, the biggest oil ETF (USO) posted its largest daily outflow on record on Wednesday, as crude prices lost some of the geopolitical premium that had built up from worries over a wider Middle East war. The U.S. Oil Fund (USO) saw a withdrawal of $376 million, topping the previous one-day record of $323 million set in 2009. After the pullback, USO has $1.3 billion in assets, which still makes it the largest oil ETF. For income investors Only 14 names in the S&P 500 that yield more than 3% or more are up at least 10% year to date. But the list includes stocks across sectors like energy, financials, and staples. Those names include Citi (C), Exxon Mobil (XOM), Kimberly-Clark (KMB), and Hasbro (HAS). Finally, in the Wall Street Research Corner Baird analysts picked seven stocks within the financial technology, payments, and services subsector they like the most. Among the selections are Global Payments (GPN), where analysts expect 2024 guidance to be raised at the bottom end. AvidXchange, where analysts predict “ongoing solid quality of earnings and core revenue likely to accelerate in coming quarters behind solid sales, Payment Accelerator, and other new products.” And Toast (TOST), which should beat on gross payment volume, yield, and adjusted EBITDA as “capitalized commissions accelerated to more than 67% in the fourth quarter.”","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2430723913"}