US fourth quarter GDP on the calendar
The first look at US GDP is one of the most-overrated economic indicators in financial markets. It rarely bares any resemblance to what the final reading will be yet it's a massive market mover.
I don't expect anything different today so if you're in the market, you need to manage the risk around the release, which is due at the bottom of the hour.
The range of economist estimates is +1.0% to +2.5%. The top-ranked forecast for this indicator on the Bloomberg survey is Scortiabank and they're at 1.9%, just shy of the median of 2.0%. If anything the distribution leans just below 2.0% but that's hardly a tell.
There are two well-known trackers from Fed offices. The New York Fed Nowcast model pegs it at +1.22% while yesterday the Atlanta Fed lowered its tracker to 1.7% from 1.9%. The reason for that drop is key -- December inventories and trade data both missed expectations and that's not captured in many of the economist estimates.
So if anything, the market is priced at 1.8-1.9%; not the 2.0% consensus.
In terms of the breakdown, watch for the consumer and any potential skews on inventories. The market is quick to put extra weight on consumer spending while discounting inventory skews.
