GDP in at 4% for the second-quarter, Twitter (TWTR) growth surprises and Amazon (AMZN) to invest $2 billion in India

Bourbon & Bayonets / Wednesday, July 30th, 2014

Markets were heading higher on Wednesday morning as U.S. second-quarter GDP came in higher-than-expected. The Commerce Department said that the April through June quarter came in showing growth at a 4% annual rate. This followed the January-March’s 2.1% annualized drop. The second-quarter’s growth marks the highest on record since the third-quarter of 2013. Analysts are still projecting growth for the entire year to come in around 3%. Some analysts are expecting the economy to pick up steam going forward. Mark Zandi, chief economist at Moody’s Analytics, said that he believes growth could surpass 4% in 2015. “I think we are finally going to start seeing more wage growth and that should kick the economy into high gear by late 2015.”

Shares of Twitter Inc (TWTR) had skyrocketed up over 35% after the company reported a strong user growth. The company said that the number of monthly active users surpassed expectations. This is important because many had concerns over whether or not the company had topped out their monthly user highs. Twitter’s engaged user base was up 24% during the second-quarter of the year. The leap in the stock price has added nearly $7 billion to their market value. There was an increase of 271 million in new users for the quarter as well. Prior to the giant leap yesterday in their stock price, the company had lost nearly 40% of their market value since the beginning of the year. Arvind Bhatia, an analyst with Sterne Agee, said, “The expectations going in had become quite low. Even in the U.S. their performance was good. For now, that will put to rest some of the concerns about U.S. growth.” Inc. (AMZN) shares were slightly higher after it was reported that the company would be investing $2 billion in India. This news comes just a day after Flipkart, India’s largest e-commerce company, gained $1 billion in new funds. Amazon started their India based website last June and has taken steps to become a leader in the country. They have started same-day delivery, added new product categories and hit the ground hard with new advertisement campaigns. Chief executive at Amazon, Jeff Bezos, said, “With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India. At current scale and growth rates, India is on track to be our fastest growing country ever to a billion dollars in gross sales.”

That’s all for today,

Warren Gates, Normandy Research

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