U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
Even the middle of April still tends to be firm on early quarter investment inflows and quarterly corporate earnings report responses. It is no secret that 70% of all corporate earnings reports beat estimates each quarter regardless of economic conditions. That is due to downbeat original estimates, where earnings reports are then predictably a bit better than expected. The current Q1 2016 reports have been very typical in that regard.
The dollar slipped again on Friday after recording its weakest quarter in 5 1/2 years, with investors doubtful that monthly U.S. jobs data will convince them to bring forward their bets on when the Federal Reserve will raise interest rates.