Wednesday was a hectic day for traders with both the Bank of Japan and the US Federal Reserve meeting intertwined with a day full of significant data
GDP came in much weaker than expected, rising just 0.1 per cent for the quarter, and that’s an annualized pace. Effectively there was no growth for the March quarter. This is the first estimate though and numbers get revised. So what drove the result? Well, poor weather mainly, and this saw investment slump 6 per cent, while exports dropped 7.6 per cent. Consumer spending wasn’t too bad, rising 3 per cent in the quarter. In Europe markets saw German retail sales fall in March, down about 0.7 per cent after a 0.7 per cent increase the month prior. The German unemployment rate was then steady at 6.7 per cent. On the ‘periphery’ Spanish GDP rose 0.4 per cent in the March quarter (0.6 per cent higher annually), while the Italian unemployment rate was steady at 12.7 per cent. Finally, eurozone inflation rose 0.6 per cent in April to be 0.6 per cent higher annually.
Stock markets rallied on the comments from the Fed sending the Dow to a new record high. At the bell, the S&P500 was up 0.3 percent, the Dow put on 45 points to be at 16,580 — a new record! — while the Nasdaq was at 4114 In Europe, the DAX was 0.2 per cent higher, the CAC 0.2 per cent lower, while the FTSE100 was also 0.2 per cent higher.
Thoughts that Twitter would turn into the next Facebook continue to be shattered by the reality of lackluster user growth. Shares of Twitter tumbled nearly 9% yesterday and closed at their lowest price since going public last year. The micro blogging site revealed results late Tuesday that reinforced jitters about its user activity and engagement. While Twitter’s financial results were “impressive,” the company’s user data “remained mixed despite management’s insistence that significant progress has been made,” he wrote.
The California-based company’s revenue soared 119% year-over-year to $250 million, but it broke even on profits. Investors disregarded the stronger-than-expected results, choosing instead to look under the hood. While the stock remains above its $26 IPO price, keep in mind the first trade on November 7 shot the stock price up to $45.10. Shares are well off that price now, having hit a new trading low today of $37.24.