Transcript for GDP Disappoints, Weighs Down The Dow
Dow futures started up this morning but turned lower on disappointing news about the country's GDP joining me now to discuss that -- all the business headlines this morning. Is Susanna Haller grant from Bloomberg TV's and its CEO -- -- that there so -- -- big headlines this morning and let's start with the GDP -- for the third quarter were released at 830 nation the economy. Grew at a rate of 2% from July to September that's half a percent below estimates. What's -- They -- you know little -- disappointing on the headline -- he mentioned and we are seeing some weakness in stocks but. What economists say is. The weaker number came because inventories we're drawn down in -- -- that may stores for example didn't keep a lot in inventory that's actually good thing that means and I can be left with excess things they're gonna need to heavily discount -- economists are still expecting. And in the -- in the fourth quarter to see growth about. -- two and a half percent still a -- ended mixed fact of course a stronger number would be better in I think that impacted numbers -- -- -- -- -- now element as well and that actually again as positive for the economy -- consumers are a little bit more comfortable spending. And during the quarter out one thing that probably was a little bit of disappointment is corporate profits weren't as strong as the prior quarter. But -- not even -- the headline number was weaker than expected economist is still expect the fourth quarter to hum along quite nicely again. -- two and a half percent growth a -- a battery acid and it doesn't signal that we're heading into our session. Any need right like you said it could mean -- folks are spending more leading after the holiday season as well okay. We saw stocks tumble yesterday on -- -- injuries could lower the country's credit rating. Now that we've learned long do you expect a rebound today. Well he did it in Sydney this is an interesting week frank because it's a short week -- a lot of folks around me. We have less volume. In the market planes yes -- we did learn after the super committee failed to come to an agreement. Yesterday is that there will be no change to the US ratings that was -- big concern by the market that's why we did see the -- yesterday. Late -- -- -- at around five or six cameras and we -- that the -- -- safe for now so perhaps you can certainly see a rebound today absent of any negative economic news perhaps coming out and year out. Or in Washington for that matter but don't come a whole lot and news today that's another thing we got the GDP figures and -- -- -- as we get. Under -- -- trading right now -- and an appearance the market is taking it in stride. Because there are less people here we can see bigger swings but yes of course it could have stocks -- and it's likely to publish a quiet day. Analysts say get some clients don't need your news coming out of Europe or Washington -- of Europe are credit rating our credit rating may be safe for now but France could see its rating lower why is that. What it's funny and Frist is a AAA credit rating may be -- hasn't even heard I got I had. As we now -- -- a little bit disturbing but prince actually is and -- in instituting a austerity measures actually. Doing a second round of austerity measures -- rolled out -- an honest or any disdain about 25000001. Of the things are -- and raising the retirement age to 62 from sixty. They're asking folks actually -- -- deal with a tax increase. Still they are certainly trying to protect their credit rating we'll see what happened and it happened doesn't -- with other nations Allen agrees. And Spain except -- in Italy they did not have a lot of success and pushing those austerity measures through. And resultant change in the top leadership but France is taking a more aggressive steps we have heard from an is an accident that there. Rating is definitely on -- and it certainly I'm not safe by any measure but they are taking the -- -- we'll see what happens in that election coming happened about six months. But Sarkozy is trying to get -- austerity measures thrill and time -- town. OK we've been covering the turmoil in Egypt in the news here rating on -- stock exchange had to be halted today why was that. Yang and they're having protests and they have elections coming up on November 20. Clearly there's a divide in the company after Mubarak stepped down in what's interesting is when -- bark was actually trying to same power and ultimately unsuccessful. The stock market closed four number of days which is highly -- usual it. The only time that's happened here any less relentless. The days following September 11 so what they did is they instituted a new policy he will -- -- -- they stopped as you mentioned for a short period of time. And then of course -- was -- -- Sox apparent ultimately -- -- 5% I believe in Egypt. That's really taken positively consider this kind of activity. -- -- into the elections and perhaps after the elections. That's come that country rather is -- eternal -- and that's a very interesting hot spot in the Middle East because as ill as we saw months ago a contagion effect could happen. Would -- the surrounding region so as we get closer to those elections. If in fact -- -- -- that's something markets will be watching because in the Middle East is still important. Of course for the oil for the entire world. Right at getting back here bank Bank of America. Action news they're getting a warning from the government what's that about you know this this is probably one of the most fascinating -- stories in the air we talked about it before but it's not usual for regulators to meet regularly with any bank the Bank of America of course is one of these banks. And has until my -- regulators according to the Wall Street Journal to really shore up your capital. Again -- -- this is. Not probably the greatest -- that regulators would actually. Having a conversation with Bank of America. Perhaps that's why we have seen in recent weeks the bank Kaye takes steps and he just sat a couple of days it on the bank. Actually sold nearly all of its stake in China construction bank. That's an Internet Bank of America that she million dollars Nelson -- lean -- over the next here a year and a half about 30000 or Paris. They're also looking for other ways to shore up capital so clearly something is under -- at BankAmerica regulators probably keeping a closer eye on -- happening. Person saying. Citibank or Wells Fargo JP or in those banks are in better shape. Listen CEO Brian Linehan have a tough time because and that. He -- -- Bank of America which had purchased countrywide which is littered with. Faulty and that mortgages and what he's been trying to gazans and -- -- get -- banking get statement this is Sok -- his last nearly 50% of its value a lot of pressure from investors about what's gonna happen going forward and it appears according to the Atlanta journal story that regulators are still concerned about the health of the banking we'll see what happens going forward it was also really interesting. His -- heard from CEO Brian ointment over there. Past couple of months and weeks and he sent -- -- OK and we don't need to you we don't need to miss our liquidity our liquidity actually he recently sent was at an all time high. And then. We here in the bank coming and taking steps to shore up their capital so there could be additional pressure from regulators that's actually -- -- They're trying to protect the bank and some. Catastrophic incidents. Look clearly Bank of America lately needs to do -- -- to get -- there still under the microscope OK let me watching -- -- -- yeah you know a couple of things -- -- talking about third quarter GDP we have the minutes were -- meeting coming out roughly around two UT fifteen today. Fills an important because we'll learn nine during the last meeting what was discussing whether or not the -- sinking an additional steps to stimulate the economy again entity STH a LO was a little bit weaker than let the market was expecting. It's still show the economy -- so that's an enemy watching and also oil. Wilson a little bit higher this morning -- just about at 97 dollars a barrel we are hearing that the USC KR. Gain stronger with the sanctions against a ransom for their nuclear program. That's something mean and falling over the past couple of days -- -- situation escalates it can actually it will hire a few days ago we are hearing whispers of what was happening in Iran with its nuclear program. He went says they are certainly making progress in that area. Accent well 200 dollars a barrel -- -- -- going to be watching. -- and look it's not a problem at the pump oil prices and believer in town this week clearly -- any surprise that can -- comment. Another headwind for the US economy and another headlining he'll be watching Susanna -- -- from Bloomberg TV thanks have a great day thank you nice.
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