Here’s why Thursday’s post-GDP sell-off may be overdone

[Pelican Press 0]

Here’s why Thursday’s post-GDP sell-off may be overdone

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, said that he does anticipate further stagnation ahead. He cited troubling signals in recent earnings results, such as Caterpillar’s most recent revenue miss. “This quarter [GDP] report is … probably not quite as bad as the headline suggests, but we think next quarter will be incrementally softer, and then [more] from there,” Nick said. Indeed, Rob Ginsberg, managing director at Wolfe Research, said that the ******* concern is evidence of persistent inflation in the first quarter, especially ahead of Friday’s personal consumption expenditure data, the Fed’s preferred inflation measure. “It’s the first data print that we’ve gotten where there’s concerns about stagflation, but I think it’s more about the inflation side of the equation than anything else right now,” Ginsberg said. “If people were worried about slowing growth and that sort of stuff, bonds would be rallying and yields would be coming in,” Ginsberg noted. “They’re actually selling off and pushing yields higher, so that to me suggests that it’s more about inflation.” On the other hand, however, Fundstrat’s Tom Lee said the soft landing scenario is intact as corporate earnings results continue to come in better than expected, with fewer inflation mentions on earnings calls. “I think the earnings backdrop has been very supportive,” Lee told CNBC’s ” Closing Bell ” on Thursday. “As painful as the last few days have been, and really the last couple of weeks, I actually think the risk/reward is positive here.” — CNBC’s Jeff Cox contributed to this report.

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