Markets were heading lower on Friday after news was released that economists have lowered their forecast for U.S. growth for the second-quarter. Growth expectations for the second-quarter were dropped from their previous 3.5% down to 3%, in a report released from the National Association for Business Economics. They have projected the growth for the entire year to come in around 1.6%, which is a sharp drop from the previously reported 2.5%. If this does ring true, it will mark the lowest growth on record since 2008. The reason behind the drop in forecast is partially attributed to expectations that consumers will be spending at a modest pace. Spending is expected to grow at a 2.3% annual rate, which is down from the 2.9% estimate last month. Kip Tindell, chief executive of The Container Store, said, “We are experiencing a retail ‘funk.’ While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014.”
Shares of Whirlpool Corp. (WHR) were trading slightly higher after the company reported that they would be paying nearly $1 billion for a controlling stake in Indesit. Whirlpool will take 66.8% of their Italian counterpart’s voting stock. This translates into $15.06 per share. Chairman and CEO of Whirlpool, Jeff Fettig, said, “We believe this will ideally position us for sustainable growth in the highly competitive and increasingly global home appliance market in Europe.”
Chrysler announced that they were placing a recall on nearly 900,000 SUVs due to a wire issue with the mirrors. The wiring issue is for the vanity mirror lights in the sun visors that could possibly cause a short. Vehicles affected are some of the Jeep Grand Cherokee models and Dodge Durango’s between the years 2011-2014. The issue has, to this point, only been noticed in vehicles that have been serviced but the recall has been placed on all vehicles. There have been three injuries due to the problem. Nearly 651,000 of the vehicles being recalled were sold in the United States.
That’s all for today,
Warren Gates, Normandy Research