ears of a Greek default and the kind of contagion referenced by the ECB in its Financial Stability Review is keeping US stocks on the back foot. US markets are settings up for a lower open on Friday ahead of the second estimate of US first quarter GDP growth.
“In the absence of a quick agreement on structural implementation needs, the risk of an upward adjustment of the risk premia demanded on vulnerable euro-area sovereigns could materialize,” the ECB said.
The comments feed into worries that bond markets could see a repeat of the jolt seen a month ago when yields of government debt jumped sharply. There is still a sense of caution running through markets following the sharp sell-off in bonds that goes a long way to explain the last few failed attempts at establishing new highs in stock markets.
US GDP is expected to be revised much lower to -0.8% from 0.2% in the first estimate. Although the data is backwards-looking, it hardly points to an accelerating US economic recovery. There’s clearly a need to normalise interest rates but the Federal Reserve is unlikely to look through a slowing economy when deciding on the timing of doing so.
Shares of GoPro jumped to a 4 month high on Thursday after news it is teaming up with Google on a virtual reality project called ‘Jump’. Tying up with Google could yield a future area of profitability for GoPro but also further establishes its place as the go-to company for hi-tech cameras
Futures suggest the:
will open 4 points lower at 2,116 with the
expected to open 48 points lower at 18,078 and the
15 points lower at 4,520.
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