Rise and shine everyone.

Today’s focus in the US will be the final estimate of the GDP growth rate for Q2 released at 8:30am ET followed by Chair Powell’s speech at 9:20am ET.

We also receive some important revisions today that can explain some of the discrepancy between estimates of output produced and income received in the US Economy. While theoretically these should match, we know that practically we see two different numbers, and the gap has been widening. (more on this below)

It’s an otherwise quiet day in terms of data from across the globe. There’s more news trickling in from China in terms of stimulus measures and clarifications of what has already been announced. Markets are taking this well.

The highlight of yesterday was Micron earnings. The stock was up 15% after the release. They delivered a double beat and raised guidance. This is breathing new life into chip stocks around the world.

US Equity Futures are higher this morning, led by the Nasdaq. Yields are lower, the USD is flat. Commodities are higher, except Crude Oil. Saudi Arabia apparently made an announcement to abandon their target of $100/bbl of oil in favor of gaining more market share.

We also have Costco reporting today, before market open.

Revisions to US National Income

The Bureau of Economic Analysis (BEA) will release revised data today on the national income and product accounts, covering the period since 2019. This annual revision could help address the gap between the value of output produced and income received in the US economy, known as the "statistical discrepancy." Currently, this gap stands at a record $769.9 billion, or 2.7% of GDP, with measured income being lower than output.

The discrepancy exists due to different data sources and adjustments for output and income. Most of the revisions are expected to affect the income side, potentially increasing profits or proprietors' income more than worker compensation, which has historically been less adjusted.

Key areas to watch include:

1. GDP Growth: Current data shows a 2.2% annual growth rate over the past five years. Revisions could lower this to 2.0% or below.

2. Personal Income and Savings: If income is revised up, it could increase the personal savings rate, improving the financial outlook for consumers.

3. Inflation Measures: Revisions to the personal consumption deflator may narrow the gap with CPI inflation, influencing the Federal Reserve's future interest rate decisions and potentially speeding up economic normalization.

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)