Republic Risk: These Numbers... Woof.

Thanks to a drop in inventory levels and exports, GDP came in under expectations. Without our massive war-time, inflationary deficit, who knows how much worse it would be? Great job, central planners.

Equity Storm Watch Is RED on the S&P 500 and RED on the Russell 2000

Markets are reacting to Meta Platforms (META), and U.S. GDP numbers were brusingly lower than expected. For the quarter, the number was 1.8%, well under the 2.4% projected by the markets. I’m still trying to understand the data. We’ve had ugly delivery numbers from Tesla and other auto companies and weakness in Boeing.

And Caterpillar took a big hit this morning.

But our government's durable goods data shows strength in these sectors. You’ve got me. Disposable income increased by 4.5% for the quarter… but “real disposable income,” which bakes inflation into the calculation, was just 1.1%, down from 2% in Q4. Meanwhile, personal savings in the U.S. decreased from 4% to 3.6%. This is an economic problem for most people at home, and media outlets and the Paul Krugmans of the world simply keep ignoring this trend. 

Meanwhile, the PCE Inflation number came in hotter than expected. So, lower growth… and higher inflation. The …