Goldman Sachs expects Q1 GDP to come in at -7%. I’ve heard rumors that the number could be as low as 10% after revisions. While this is obviously negative there is a bright side to the data: one year after each of the 10 worst GDP readings the market was up on average 25%.
This appears to fit in nicely with my longer-term thesis and predictions. While I have been very bearish for years I continue to think there will come a time during this year where my long-term outlook changes drastically to the bull camp. I don’t like to look out much more than a quarter in advance (because I don’t believe the market discounts much more than a quarter in advance) so I’ll take the data as it comes and change my market outlook accordingly, but as of now it looks like Q1 might just end up being a trough or a near trough in U.S. GDP which would certainly be a positive sign for the economy.