U.S. Economy Grew Roughy in Line with Expectations, Well Down from 3.2 Percent in Q3 2022

We’re closer to the climax of the earnings season, so investors are getting more and more data to chew over every day. Tesla, IBM and Levi Strauss headlined Wednesday’s after the bell earnings, while several more hit later tonight, including Comcast (CMCSA) before the bell and Intel after the market closed. U.S. stock markets, meanwhile, posted a mixed day. The Dow squeaked out a win Wednesday after falling more than 400 points earlier in the session. The S&P 500 and the Nasdaq Composite fell slightly.

Yesterday the U.S. equities rallied back from big early losses and ended flat as the latest group of financial reports raised concerns about corporate profits and the possibility of a recession. The Dow squeezed out a small gain, while the S&P 500 and Nasdaq fell fractionally.

Corporatewise, shares of The Walt Disney Company (DIS), McDonald’s (MCD), and Walgreens Boots (WBA) rose 1%, bolstering the Dow Jones to a 4th-straight winning streak. Shares of Amgen (AMGN), Chevron (CVX), 3M (MMM), and The Travelers Companies (TRV) fell 1%. Microsoft (MSFT) shares slipped following the software giant’s warning about revenue growth. Boeing (BA) shares made a U-turn, bouncing back from morning declines to end the day up 0.3% after the plane maker posted a surprising fourth quarter loss.

American Airlines (AAL) released its earnings report for Q4 2022, announcing that its revenue reached $13.2 billion, soaring 40% compared to the corresponding quarter a year ago. The airlines' net income reached $803 million in the final quarter as opposed to registered net loss a year ago. For the three months ending on December 31, the diluted earnings per share was $1.14.

Morgan Stanley (MS) fined some of its own bankers more than $1 million each for conducting business on WhatsApp and other messaging platforms. The funds have either been clawed back from previous bonuses or will be docked from future pay, according to a person familiar with the matter. Meanwhile Tesla (TSLA) rose in late premarket after the EV-maker reported better-than-expected earnings and said it was on track to deliver about 1.8 million vehicles this year.

U.S. GDP, adjusted for inflation, increased at an annual rate of 2.9% in Q4 2022. That was down from a 3.2% growth rate in Q3. Consumer spending grew at a 2.1% rate. The data is preliminary. Consensus estimate expected GDP to have grown by 2.8%, which would be down from the 3.2% pace in the third quarter. Market watches and economists are looking for clues about what the economy will do this year. Talk of a recession is building, although there are some who believe the U.S. will avoid such a slowdown in 2023.

It's the latest fallout from an industrywide probe that saw US regulators impose record penalties for monitoring lapses. Last year, Morgan Stanley agreed to pay $200 million in fines to the Securities and Exchange Commission and the Commodity Futures Trading Commission.

European markets rose after two days of losses as upbeat earnings gave confidence that some sectors' profit margins can withstand the rapid rise in inflation.

Major Asian stock indices traded mostly higher earlier this morning. In a report published earlier today, the Bank of Japan reiterated its stance toward maintaining the loose monetary policy in order to bring inflation to the target 2% range "in a sustainable manner." Meanwhile, South Korea's central bank said the country's economy dipped in the last quarter of 2022 for the first time in two and a half years.

Hong Kong's Hang Seng closed +2.57% higher after a five-day holidays, while South Korea's Kospi Composite gained 1.65%. On the other hand, Japan's Nikkei 225 slipped 0.12%. Markets in mainland China and Australia were closed for the holidays.