The Dow is totally flat after a negative trade-deficit report has analysts slashing U.S.fourth-quarter GDP forecasts. As of 1:15 p.m. EST, the Dow Jones Industrial Average (^DJI -0.11%) is up a fraction of a point, while the S&P 500 (^GSPC 0.02%) is down 0.19%.
There were three economic reports this morning.
|
Report |
Period |
Result |
Previous |
|---|---|---|---|
|
Trade deficit |
November |
$48.7 billion |
$42.1 billion |
|
Import price index |
December |
(0.1%) |
(0.8%) |
|
Export price index |
December |
(0.1%) |
(0.7%) |
Source: MarketWatch U.S. Economic Calendar.
This morning the Department of Commerce reported that the U.S. trade deficit expanded in November by 16% to $48.7 billion. That's above October's $42.1 billion and far worse than analyst expectations of a decline to $41.3 billion. The worsening trade deficit suggests a worsening economy. Analysts from JPMorgan reduced their forecasts for Q4 U.S. GDP growth from 1.5% to 0.8%, while Barclays lowered its estimate from 2% to 1.3% and Morgan Stanley slashed its outlook from 1.5% to 0.7%.
US Trade Deficit data by YCharts.
The second economic release was from the Department of Labor, which reported that both the U.S. import price index and the U.S. export index fell 0.1% in December. Year over year, the import price index is down 1.5%, mainly from a decrease in fuel import prices. The export price index rose 1.1% year over year, buoyed by a 12.8% rise in the price of agricultural exports.
After the downbeat trade deficit report, it's no surprise that the market is going nowhere.
Today's Dow leader
Today's Dow leader is Chevron (CVX 0.44%), up 1.2% to $111.78. Yesterday Chevron released it Q4 interim update, saying it expected both upstream and downstream earnings to be notably higher than in the previous quarter. In the company's upstream operations, through the end of November, Chevron had already produced more liquids and natural gas than in any full quarter so far this year. That leaves the full month of December's production left to really boost the production numbers. Chevron has been benefiting greatly from the fact that more than two-thirds of its oil production is international. This enables it to sell to the world market, where the price of oil is $110 per barrel -- a full $17 higher than in the U.S.
