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JP Morgan Cuts Q2 GDP Forecast

Tyler Durden's picture




 

Once again Zero Hedge is just a week or so ahead of the "experts." A week ago, in a post titled "April Vehicle Assembly Rate Collapses, May Industrial Production Estimates To Be Cut" we concluded "Expect to see drastic downward cuts to May Industrial Production and next, to Q2 GDP." Enter JPMorgan's Michael Feroli with "Motor vehicle sector to drag on Q2 growth." Full text: "We are revising down our outlook for the annual growth rate of real GDP in Q2 from 3.0% to 2.5%. The main factor behind our revision is weaker output of the motor vehicle sector. Based on industry data we project that real output in this sector will decline at around a 20% annual rate, which would subtract 0.5%-point from GDP growth. From an expenditure category perspective, we see most of this weaker output making itself felt in a softer pace of inventory accumulation (with some offset though weaker imports). A portion of this shortfall reflects supply chain disruptions associated with the Tohoku earthquake. Anticipating a fading of those disruptions, auto production schedules look for a rebound in output in the third quarter, which, along with somewhat lower gasoline prices, supports the case for an acceleration in growth next quarter to 3%. The change to our second quarter growth forecast is modest enough not to have a significant impact on our projections for labor markets or inflation. We continue to anticipate a first Fed rate hike in 13 Q1." Next up: Goldman revising their Q2-4 GDP "hockeystick" to be more reminiscent of a "baseball bat."

 

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Tue, 05/24/2011 - 14:29 | 1306059 Hard1
Hard1's picture

Guess it's my turn: GeeeDeeeePeeee Bitchezzzz!

ZH, the best research now.  Perhaps a tendency to be a bit bearish, but a lot more accurate than the street chearleaders.

Tue, 05/24/2011 - 14:30 | 1306082 Clueless Economist
Clueless Economist's picture

I believe immediate hepl is needed for our hard working UAW brothers.  I propose we print $1 Billion and give it to the UAW general fund.  This will save dozens of good union jobs. 

Tue, 05/24/2011 - 14:38 | 1306118 LRC Fan
LRC Fan's picture

Only a billion? 

And what about creating new jobs?  Better add about 50 billion onto that just to be safe. 

Tue, 05/24/2011 - 14:40 | 1306139 Cash_is_Trash
Cash_is_Trash's picture

Bring on the double dip!

Keynesian policy is absolute rubbish. There is no recovery, nada.

How long until JPM lowers its forecast to 2% and 1.5% next? 3 weeks?

Tue, 05/24/2011 - 23:14 | 1307772 silberblick
silberblick's picture

Click below to see a visual graph of Bankster's dirty needs arranged according to Abraham Maslow's hierarchy of needs: http://thesilvergoldhedge.blogspot.com/2011/05/banksters-dirty-hierarchy...

Tue, 05/24/2011 - 15:10 | 1306264 TruthInSunshine
TruthInSunshine's picture

Dr. Paul Krugman,

We anxiously await release of your Nobel Laureate quality treatise 'In Order To Pay Down The National Debt, We Should Print The Equivalent Amount of Dollars & Distribute Them To Treasury Note Holders.'

I am looking forward to reading this dissertation.

Tue, 05/24/2011 - 15:35 | 1306383 Hugh G Rection
Hugh G Rection's picture

bit off topic but anyone watch the HBO movie TBTF yet?

 

Fucking disgusting, made Paulson and the Bernank look like knights in shining armor.

Tue, 05/24/2011 - 14:42 | 1306078 etrader
etrader's picture

More intraday margin rate increases due to "unprecedented volatility" from IB coming across the wire.


Tue, 05/24/2011 - 14:31 | 1306089 redpill
redpill's picture

These guys are almost as timely as S&P and Moody's.

Tue, 05/24/2011 - 14:36 | 1306106 Dolemite
Dolemite's picture

Sell the afternoon equity pop?

http://deadcatbouncing.blogspot.com/

Tue, 05/24/2011 - 14:41 | 1306112 LRC Fan
LRC Fan's picture

Market could care less.  GDP doesn't matter, jobs don't matter, housing doesn't matter, unless it's a positive surprise.  Otherwise, all that matters is the amount of free Benny Bux circulating on Wall St. 

Actually I lied.  The Euro matters.  Euro up, stocks down.  And vice versa.  Then European stocks go up or down based on what US stocks did, and it's like an endless feedback loop higher. 

Tue, 05/24/2011 - 14:38 | 1306117 Hedgetard55
Hedgetard55's picture

PPT straining to keep the DOW green, think they need some more Benniebux Viagra.

Tue, 05/24/2011 - 14:37 | 1306129 LRC Fan
LRC Fan's picture

Don't worry we will close green come hell or high water. 

 

Tue, 05/24/2011 - 14:45 | 1306149 SheepDog-One
SheepDog-One's picture

Gold definitely will close well green. As far as the fake stock markets, who cares.

Tue, 05/24/2011 - 15:10 | 1306140 TruthInSunshine
TruthInSunshine's picture

JPM cuts GDP SWAG.

IOW, JPM joins other PDs/TBTF begging for more easy mo' from Bennie po-po'.

Easy Bernankle/Jeetner money is the QEueeeesiest!

Tue, 05/24/2011 - 14:46 | 1306156 SheepDog-One
SheepDog-One's picture

DAMN and just when they had all established such rosy outlooks! 

Tue, 05/24/2011 - 14:55 | 1306188 slewie the pi-rat
slewie the pi-rat's picture

radioactive econometrics + BiChFlation = oops!

Tue, 05/24/2011 - 14:58 | 1306214 buzzsaw99
buzzsaw99's picture

Just another tricky (+$100M) day for JPM.

Tue, 05/24/2011 - 14:56 | 1306215 TruthInSunshine
TruthInSunshine's picture

SodaStream will save us from our woes. It's the modern day equivalent of discovery and mass production of the internal combustion engine, bitchez:

05-24 14:47: SodaStream moves up following positive mention on CNBC

Tue, 05/24/2011 - 15:07 | 1306251 Dick Darlington
Dick Darlington's picture

We are all saved, Jim "creamer" Cramer supports the wealth effect by spinning the wheel of fortune one more time.

05-24 14:49: Sodastream (SODA) spikes 2.58% higher following coverage by CNBC's Jim Cramer
Tue, 05/24/2011 - 15:06 | 1306259 LRC Fan
LRC Fan's picture

Better get the SEC on this.  We need an investgation, asap!

Tue, 05/24/2011 - 15:22 | 1306336 swmnguy
swmnguy's picture

Dammit.  I like my little sodastream fizzy water maker. It's very convenient and economical.  I guess I'd better hoard supplies for it if Cramer has given it Il bacio della morte.

Tue, 05/24/2011 - 15:18 | 1306296 cowdiddly
cowdiddly's picture

3 years of ummmmmm....... next quarter.

Tue, 05/24/2011 - 16:12 | 1306513 mayhem_korner
mayhem_korner's picture

Anyone check out the lower right hand corner, where the Morgue is projecting the U.S. debt at $1.1T in 2012? 

So they're banking (no pun intended) on the do nothings to douse $500B.  Did I miss an election?

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