Friday, July 30, 2010

Gross Domestic Product

GDP = Consumption + Foreign Direct Investment + Government Expenditures + Net Exports

Second quarter GDP came in at an annualized 2.4 percent growth, following a revised first quarter gain of 3.7 percent. Today's release includes annual revisions going back three years. The second quarter advance estimate is just barely below analysts' projections for a 2.5 percent increase. But the first quarter upward revision of a full percentage point from the prior estimate of 2.7 percent is a positive surprise.

The latest quarter was led by a rebound in residential investment, a jump in investment in equipment & software, and by inventories. PCEs also posted a moderate gain along with government purchases. The big negative is a worsening in net exports.

Equities tanked early in the trading session, but managed to eke out minimal gains by the close. I did not execute any trades today. However, I simulated some options trades with GLD and SLV. Needless to say, the new strategies look good. Look for M&A news on Sunday to boost equities on Monday morning. Have a great weekend!

Patrick M. Ambrus
Analyze Capital LLC
Twitter: Analyze Capital

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