Q1 GDP Revised Upward

We are seeing some bounce-back this morning following two dire days in the stock market. Futures in the U.S. are up ahead of the opening bell, and markets across the pond — FTSE, German DAX and French CAC — are all up 2.5% overnight. Italy’s index — one of the most downtrodden in the immediate aftermath of the Brexit vote, was up more than 4% Tuesday.

The third and final revision to Q1 Gross Domestic Product (GDP) came out this morning with an upward revision, from 0.8% in the second read to 1.1% this morning. An even 1.0% had been expected. This very slight improvement to revisions — 1.1% growth is clearly nothing to jump for joy about — nevertheless gets us closer to what was anticipated by analysts prior to the disappointing first read earlier this quarter.

Digging into this data quickly, we see worse Consumer numbers but better Business investment. Consumption was at 1.5%, which was 0.4% lower than expected. Pricing index hit 0.4%, also light by 0.2%. Business investment made up the difference — up from 0.6% to 2.2%.

For Q2 GDP, analysts are expecting a rebound to around 2.5%, though we know how these numbers can fluctuate. We, of course, do not include much if any downward pressure from Brexit, as it has come so late into Q2, although we do expect some GDP pressure as 2016 unfolds completely.

Speaking of Brexit, European leaders have gathered for an EU summit, where current British Prime Minister David Cameron said he expects an orderly and ultimately successful outcome to the decoupling process of Great Britain and the EU. We will be paying attention if EU members are somewhat less gracious regarding how this event will transpire.

Keeping in the U.K. a moment, by Thursday we expect to see who the players are to potentially replace Cameron as Prime Minister. As of this morning, those candidates are considered to be former London Mayor Boris Johnson, Chancellor George Osbourne, Conservative members of Parliament (MP) Theresa May and Michael Gove.