Shock! -- Drudge Report; Disappointing -- WSJ; Horrendous -- Reality -- July 29, 2016

The government's first estimate for 2Q16 GDP is absolutely horrendous. Horrendous.

GDP Now almost got it right but was too optimistic. The Wall Street Journal was way too optimistic.

See this post, posted just before the 2Q16 GDP figures were released. GDP Now lowered the forecast from 2.3% to 1.8% one day after new numbers were released.

The WSJ forecast an incredible 2.6% growth.

In fact, the economy responded less than half the 2.6% growth predicted by The WSJ. The story at Bloomberg:

The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.

Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.

Makes me wonder about the economists surveyed by Bloomberg. 

Had this happened under a Republican administration after putting us $20 trillion in debt, Bloomberg would have hammered the GOP. But I guess under this administration, its just part of the business cycle. 

Horrendous.

Reminds me of the day some weeks ago when the jobs number for May was released. Shocking.

So, let's see how the market is taking this. I can only imagine. Hold on to your hats buckaroos.

• S & P 500: down almost 4 points, to 2,166
• Dow: down almost 60 points, to 18,398
• WTI: down another 45 cents; below $41, and now about $40.69

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Back to the Bakken

Active rigs:

	7/29/2016	07/29/2015	07/29/2014	07/29/2013	07/29/2013
Active Rigs	35	73	192	179	179

RBN Energy: update on pricing and takeaway capacity for natural gas in the northeast, Marcellus and the Utica. 

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Are You Kidding Me?

UPS blames "higher fuel costs cut into its profits." Really? Fuel has never been so inexpensive. Sure, it might have gone up a bit quarter-over-quarter (albeit very little) but year-over-year? From The WSJ: 

United Parcel Service Inc. on Friday reported profit rose 3.2% in the latest period, though higher fuel costs cut into climbing revenue from its U.S. and international package deliveries.

Oil prices rose during the latest quarter, and UPS said lower fuel surcharges in the quarter hurt results. The company’s fuel surcharges are typically tacked onto shipments to cover that cost, but they lag rising fuel prices by a couple months.
Revenue rose 2.4% in the U.S. package segment and 1.1% in the international package segment.

Over all for the June period, UPS posted earnings of $1.27 billion, or $1.43 a share, compared with $1.23 billion, or $1.35 a share, a year earlier. The per-share figure was helped by a lower share count in the latest period. 

You mean to tell me that with gasoline and diesel fuel at incredibly low prices, UPS is still able to "tack on fuel surcharges"? I could see that when gasoline was selling for $4.00/gallon and $100-oil, but we're seeing gasoline now well below $2.00/gallon. Obviously I'm missing something; The WSJ wouldn't report this if it weren't true.