U.S. GDP Grew by 3.2 Percent on Annualized Basis

Dow Jones futures fell this European afternoon, along with S&P 500 futures and Nasdaq futures. Micron Technology (MU) and Tesla (TSLA) were in focus. Semiconductor maker Micron, squeezed by declining demand for personal computers, said it would reduce its workforce by about 10%, while also suspending bonuses. Micron announced the decision as it posted its latest quarterly results and forward guidance, both of which fell below Wall Street’s expectations.

Across the most visible macro, The U.S. economy grew at a faster pace in Q3 than previously reported as consumers continued to spend even in the face of painfully high inflation and rising interest rates. U.S. GDP grew by 3.2% on an annualized basis from July through September, the Commerce Department said in its 3rd and final reading of the data. Meanwhile, initial jobless claims in the U.S. increased by 2,000 in the week ending December 16 on a weekly basis, reaching 216,000 jobless applications.

Notwithstanding, yesterday’s data showed U.S. home sales tumbled a deeper-than-expected 7.7% in November from October, marking the tenth consecutive month of sales declines. The sales reflect contracts signed in September and October, when interest rates had peaked before coming down a bit in recent weeks.

The stock market rally had a solid advance yesterday, with Nike (NKE) surging and FedEx (FDX) leading the way on earnings, also buoying some peers and related stocks. The S&P 500 index rallied to just above its 50-day line, a positive sign but not a decisive one.

Corporatewise, Apple (AAPL) managed to rise modestly, extending a bounce from just above bear market lows Tuesday. Tesla (TSLA) was unable to eke out a gain, closing slightly lower. Tesla late Wednesday doubled its year-end delivery discount in the U.S.

In Europe, as of 3:15 p.m. CET, the Stoxx 600 trimmed some of its earlier gains as autos, tech and consumer products underperformed. At the time of writing, the British FTSE is edging higher by 0.15%, however, German stocks slid by 0.70%, while France’s CAC 40 retreated by 0.44%. On an annual basis, the United Kingdom's GDP climbed by 1.9% in Q3, 0.5 p.p. down from the expected reading, and pulling the economy about 0.8% below the pre-pandemic level.

The Central Bank of Russia approved the sale of Otkritie Bank to VTB for 340 billion rubles. The parties to the agreement decided that the ownership of the Otkritie shares would be effective no later than December 31 "subject to the fulfillment of payment obligations in full."

China plans to cut quarantine requirements for overseas travelers in January, according to people familiar with the matter, as the country dismantles the last vestiges of its Covid Zero policy. Officials are considering a “0+3” policy. China is likely experiencing 1 million Covid infections and 5,000 virus deaths every day as it grapples with what is expected to be the biggest outbreak the world has ever seen, according to a new analysis.