Friday Trading Cheat Sheet: 3 Stories That Moved Markets

U.S. stocks declined on Friday following a weak retail sales report and a decline in producer prices. At the close:

DJIA: +0.00% to 14,865.10 S&P 500: -0.28% to 1,588.86 NASDAQ: -0.16% to 1,588.86
Gold: -$77.60 to $1,487.30 per ounce Oil: -2.74% to $90.95 per barrel U.S. 10-Year: -0.68 points to 1.722%

Here are three stories that helped move markets today:

1) U.S. GDP Growth: The Bulls and Bears Can’t Both Be Right: U.S. gross domestic product could grow just 1.7 percent in 2013, according to a downwardly-revised forecast from the International Monetary Fund. According to a draft of the IMF’s World Economic Outlook obtained by Bloomberg, the fund reduced its U.S. GDP forecast from 2 percent growth because of the fiscal tightening (sequestration) that began last month.

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This angle — that sequestration cuts and tense fiscal negotiations in Washington will drag on 2013 economic growth — has been championed by economic bears ever since it became clear that the U.S. would be unable to avoid some sort of spending correction. Economists at Goldman Sachs forecast that sequestration cuts — $85 billion this year — will shave 0.75 percentage points off second- and third-quarter GDP growth… (Read more.)

2) Will Retail Sales Bring the Economy to a Screeching Halt? Retail sales figures have faced comparison to strong numbers from last year, and they have not stood up well. Early in the year, the consumer spending growth thesis put forward by many analysts, pundits, and even several retailers themselves postulated that the end of the payroll tax holiday would cause the majority of Americans to tighten their financial belts and cut way back on discretionary spending. This reality now seems to be materializing.

In March, retail sales were held back by the scant progress made in the labor market over the same period. Combined with little growth in wages, Americans found it difficult to spend, which is concern for economists as consumer spending accounts for approximately 70 percent of the economy… (Read more.)

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3) Consumer Sentiment Hits Nine-Month Low: Despite the recent rally in stock prices, consumers are still feeling down about the economy as Main Street struggles to recover from the worst financial crisis since the Great Depression.

The index of consumer sentiment compiled by Thomson Reuters and the University of Michigan plunged to 72.3 in April, compared to 78.6 in March. It is a preliminary reading, but it is the lowest level of sentiment since July 2012 and the biggest miss of expectations on record. The reading was lower than all 69 estimates in a Bloomberg survey. On average, economists projected the index to come in unchanged at 78.6… (Read more.)

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