US Stock Futures Fall After 2.4% Rise In 2Q GDP; DJIA Off 70 (less than EXPECTED 2Q growth)

Wall St. Journal ^ | 07/30/2010 | Donna Kardos Yesalavich

[OldDeckHand]

NEW YORK (Dow Jones)--U.S. stock futures fell Friday after data showed the U.S. economy slowed in the second quarter and the government said the recession was deeper than earlier believed, adding to concerns over the recovery's strength.

Dow Jones Industrial Average futures were recently off 70 points at 10339, while Standard & Poor's 500 futures dropped 8 points to 1089 and Nasdaq Composite futures declined 15 points to 1842. Prior to the data, Dow futures had been off 42 points, S&P 500 futures were down 5 points and Nasdaq futures were off 9 points. Changes in stock futures do not always accurately predict early stock moves after the open.

The Commerce Department Friday said U.S. gross domestic product, or the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 2.4% in April to June. In its first estimate of the economy's benchmark indicator, the government report showed growth was lifted by business investments and exports. Consumer spending, a key growth engine for the U.S. economy, made a smaller contribution to growth.

[OldDeckHand]

More green shoots.

[PA Engineer]

I guess the PPT cannot buy enough Citigroup and Bank of America stocks to pull it out of the dive.

[LibLieSlayer]

obamonomics communist DEPRESSION.

LLS

[Para-Ord.45]

Hilarious to see Joe, the aneurysm , Biden running around the country telling everyone it`s the summer of recovery !

2.4 will be revised down as the data comes in and if one subtracts the Trillions being pumped in by the messiah AND after that well goes dry look for even weaker GDP numbers.

[My Favorite Headache]

America is failing big time and Obama is doing all he can to make sure as much damage as he can do is done in record time.

[BenLurkin]

Unexpected!

[SeekAndFind]

RE: it`s the summer of recovery !

It's an endless summer bummer.

[Proud_USA_Republican]

Recovery summer!!!

[chuckles]

Wait till the jobless report next Friday. It maybe be job losses or even a few thousand gained, but it won't be + 100k. People will finally settle in that Obama crap isn't working. They can't seem to figure out that companies making profits has little to do with the economy. They can fire people, cut inventories, cut raises and overtime, ect, to make more money for awhile. But for long term profits that enable expansion, you have to be pro business, pro growth, and provide tax relief. None of which this administration is doing.

People need to finally learn that taxes and spending ARE NOT CONNECTED! Tax relief helps the economy and Tax hikes kill it. Spending can either go up or down depending on the Congress. If you don't want to owe so much,.......STOP SPENDING! If you want the economy to bounce back, CUT TAXES! The two ARE NOT CONNECTED. Trying to lower the deficit by raising taxes is CONTRARY to job expansion. Company XYZ doesn't care about Obama's stupid plans and WILL NOT pay for them. They will continue to shrink their business till they finally move offshore to save themselves,....Not American Jobs! Saving jobs is not what they are paid to do, but making money is.

Obama is just a socialist moron that believed what he taught in school. He is pouring over the book Hugo Chavez gave him trying to figure out what he should do next to make America as successful as Venezuela.

God help us.

[OldDeckHand]

"The two ARE NOT CONNECTED"

I agree with everything you've said, with the exception of this. While spending - especially deficit spending - has probably negligible effect on the immediate economy, long term is a different story. Reckless increases in the money supply, and all the negatives effects associated with those increases, aren't helpful to the long-term health of this economy, or any economy.

You can't keep printing money and expect that at some time in the future, you're not going to be left without a chair when the music stops; Just ask Greece how that worked out.

[DaxtonBrown]

You are on the right track, but you’re missing the real point. It isn’t the amount of money printed, it is the impact of government on the economy, how much production they siphon off. A country with zero taxes which printed all the money it spent would be better off if it limited spending to 10% of GDP than a country that ran a balanced budget but soaked up 25% of GDP. That’s why the taxes/spending argument is specious, it’s the percent of GDP that matters.

[W-Girl]

More green shoots.

+++++++++++

You could not have described it better !!

Obama ......either Jimmy Carter STUPID or EVIL smart !!

God Bless the USA ...it’s going to need all the help it can get !!

[OldDeckHand]

'A country with zero taxes which printed all the money it spent would be better off if it limited spending to 10% of GDP than a country that ran a balanced budget but soaked up 25% of GDP."

In a vacuum, that might be true. However, this economy is but one of hundreds in a global economy, and the relative value of our currency to other currencies in the global economy, is an important variable, as the citizens of Zimbabwe would likely attest to. If our currency is worthless even though our government spending is but a fraction of our economy, that's not "healthy" either.

I understand and agree with what you're saying about government spending relative to GDP, and clearly the Japanese during the "lost decade" would attest to that.

[MrPiper]

Does anyone remember Gomer Pyle...:

SURPRISE,, Surprise... GOllee!! Who'd a thunk it :)

[ichabod1]

That’s what they get for listening to Biteme.

[ichabod1]

It’s like a tea partier said on Beck, this stuff was going on long before osama. There was no change, it was just the same old stuff, but on speed. We are going to have to take it down before we can build it back up. Sad sad trooff, dirty low down.

[ichabod1]

It’s not that deficits don’t matter, it’s just that the spending is so far beyond what can be raised in taxes that the two things aren’t really related any more.

[EGPWS]

No doubt it was unexpected, however still showing a promising outlook because of the Obamanomics of destruction.

Any more whenever this administration is brought to my attention the theme to "The Three Stooges" comes to mind.

[RayChuang88]

Today's stock market indices movement is akin to riding the Millenium Force roller coaster at Cedar Point amusement park--WAY too much excitement for me! Small wonder why a lot of people are "sitting on the sidelines" and not investing in the stock market.

[MrPiper]

Today's stock market indices movement is akin to riding the Millenium Force roller coaster at Cedar Point amusement park--WAY too much excitement for me!

May the force be with you,, invest in ammo... always worth something.......gold?? not so much...

[Ghost of Philip Marlowe]

Mediocre news that turns out to be bad upon further analysis = 100 pt rally.

Bad news that is spun to be good that his horrible upon analysis = down 1 pt.

The manipulation is disgusting and the people behind it should be tarred and feathered and jailed.

[cranked]

...unexpected....Bush’s fault....inherited....etc.... =.=

[chuckles]

We agree. Perhaps I wasn't clear in what I wrote. I know the effect of deficit spending long term, what I meant was, taxes and spending are not directly connected. You could lower tax rates and actually collect more money in total. And you could also raise taxes and have lower tax receipts.

The talking heads would have you believe that we will raise taxes and lower debt. That is bogus. Always has been. If you remember Bush 41's pledge of "NO NEW TAXES", what happened was, he made a deal with the Dems( NEVER a good idea) that he would raise taxes if they would lower spending. Of course he kept his word and the Dems moved their lips so they were lying. He took the biggest political hit in history for believing a Dem. So, after sacrificing his 2nd term, we still end up with higher taxes and higher spending and more debt. Gingrich did it right. He balanced the budget by raising spending less than inflation,........period. That's it, easy. Remember the gubmint shut down? He meant business and fixed the country in one term. Course, the bent one got the credit after saying just one year earlier in the SOTUnion "Deficit's as far as the eye can see". Clinton's tax policy had nothing to do with anything. It was Gingrich and the Republicans SLOWING( not cutting) spending.

The secret of inflation is borrowing money when a dollar is worth something and paying the debt off with worthless paper. Obama doesn't care because he knows that it will all work out in the wash when a dollar is worth a dime he just pays China with worthless money. Sorta like buying a TV from China for $1000 and paying off the debt with $800. Its a trick as old as Argentina. Course Americans will have to get used to living in tar paper shacks and riding mopeds, but hey, thats what the Dems have been shooting for forever. Us evil Americans must be brought down to the Vietnamese or Kenyan level to be "fair".

[OldDeckHand]

"You could lower tax rates and actually collect more money in total. And you could also raise taxes and have lower tax receipts."

Yes, yes - absolutely. In fact, I believe that after we recovered from the 200/2001 recession, federal tax receipts as a percentage of GDP were at an all time high, even after the Bush tax cuts. I'd have to look a little more closely at the figures myself, but I have previously read that.

Essentially, it completely undercuts the opinion that the Bush tax cuts were responsible for the deficit - they weren't. We had more revenue as a percent-to-GDP than we ever had, but we also had ridiculously unrestrained spending. Expense was our problem, not revenue.

[chuckles]

If you want to get right down to the “brass tacks” of what the people really want it would be to have a minimalist government with maximum freedom. In order to have that we must cut the budget for things like farm subsidies that lose votes in the Midwest, oil subsidies which lose votes in the south, and beekeeper, solar, wind, and on and on that always seem to lose some votes somewhere. I just don't know if we will ever have the “cojones” to do what is needed to get our country back. People seem to have a false notion that big spending helps things and it requires higher taxes. Even Reublicans are falling into the trap of "If you start a program, you have to pay for it". No You don't. We have had deficit spending for 200 years. What we should be saying is keep the taxes low and quit thinking up crap to spend money on. Low taxes garauntee's more freedom and prosperity, while government spending just raises the debt. Just think about the economy if the "right" Repblicans could win and we cut spending from $2+ trillion to say $1 trillion. The economy would blast off without changing a thing on the tax side. It's like telling a sick person they need more leeches and they agree till they die. I, frankly can remember in my lifetime not ever giving a hoot what the government thought or did, other than wars. Now, tax planning and reading regulation changes is an everyday thing to plan your life around. In the past we didn't have health care problems until Medicare and Medicaid came along and most people seem to have other funds to augment their retirement. Now it seems we try to live on Social Security alone and depend on the government for our health care when we get old. The more people we have feeding at the trough, the more Democrats we will have to defeat at each election. Schools were better when we didn't have a Dept. of Education, and you could make a list of other wastes of money that have been formed over the last 40 years, OSHA, EPA, ect. We just simply can't afford it any longer and it takes the fun out of being American. When it gets easier to live in Panama than in the US, maybe would reassess what we are doing to ourselves.

Telling people that taxes and spending are not connected at the hip is important for voters to finally comprehend. I'm also passionate about correcting people when they say we are a democracy. We are a Republic and there are important reasons for that. As you can see recently, Dems want to circumvent the Constitution and give their state electors to the popular vote winner instead of the local vote winner. This is what the founders thoughtfully solved when they invented the Electoral College. Now, Oklahoma, Nebraska, Kansas and others will be told to go to hell by New York and California. All this because people have been allowed to believe we are a democracy.

[bert]

.....Wait till the jobless report next Friday.....

That report will be as fictitious growth report.

New unemployment applications for the month are 1.8 million

The jobless report will never reflect that truth

[bert]

.....Wait till the jobless report next Friday.....

That report will be as fictitious growth report.

New unemployment applications for the month are 1.8 million

The jobless report will never reflect that truth

[chuckles]

Everyone knows the jobs report is fiction, but what Wall Street is looking for is a big number “created”. The rate will be up or down depending on how many stopped looking, so if the rate goes to 9.4% or some such number, the Dems will be crowing, but Wall Street will be selling. We need a big number like up 250k to get Wall Streets attention. We have to make 150k-200k a month just to keep up with newbies joining the workforce. If we get 20k or something, Obama will crow that he is growing the job base because it's not negative. Everybody that knows anything knows that's not true. The 4% rate under Bush looks pretty good about now I would think. He would get a 300k new number and the talking heads would say that's anemic. Sept and Oct is coming so we have to have a reason to go down on Wall Street. November could be big with a Repub takeover. 2011 will depend entirely on Bush tax cuts being extended. If they are modified or expire, 2011 will be a baaaaaaad year. Right now, I'm betting bad year. The damage is done and in the pipe. Sometimes you just have to pay for your vote. The Bible teaches us that the Jews paid for bad kings and were blessed with a good king. We made our choice, now we pay.