The U.S. economy expanded by 4 percent in the second quarter? Whoa!
That balances the anemic first quarter gross domestic product (GDP) of –2.1 percent. So what are we left with for the second half of the year? Roughly 2.5 percent growth, or perhaps a bit higher? That would average perhaps 2 percent growth for the entire year.
The problem for traders is that we are back to a choppy market. You get a down day like yesterday and an up day, and you can't stay hedged. Investors are looking for trends: for example, you're looking for 5 down days in a row. That's how you make a lot of money...when you get zigzag pattern, it eats your hedges away and the value drops materially.
Stocks go up, but your hedge gets much less valuable. The bottom line: you can't stay heavily hedged.
Still, big GDP numbers on a Federal Reserve decision day! The market needs to hold its early gains.
Elsewhere
The initial public offering (IPO) market is choppy, but big names are coming. Ethylene producer Westlake Chemical Partners LP (WLKP) priced 11.25 million shares at $24, well above the $19—$21 range. This is a yield play: 4.6 percent yield, and long term contract with its parent, Westlake Chemical.
These yield plays have been popular. The assets are put into a partnership vehicle, usually with a long term contract from a partner (in this case, Westlake Chemical). These partnerships are taxed at the individual rather than the corporate level, so there is a bit of a tax play as well.
Still, conditions have been messy. There are 22 IPOs supposed to price this week, but already several have been postponed. These include Mapi Pharma (MAPI) was postponed, as well as medical imaging company Lantheus Holdings (LNTH).
Bottom line: there are too many IPOs coming out, so investors may be getting overwhelmed by the mess of choices.
There are at least 9 IPOs pricing tonight, with the biggest one being Synchrony (SYF), the former GE Capital, the largest private credit card issuer, is seeking to raise 125 million shares at $23—$26.
The IPO to watch is Mobileye (MBLY), seeking to raise 27.8 million shares at $21—$23, but that was already raised from $17—$19. They are the leading company that makes the software for cameras that go into cars for driver assistance systems. They are set to price Thursday night for Friday trading.
The company's sales are increasing fast: 2013 sales were $81 million and last quarter was $35 million, so the run rate is $140 million for this year. Margins are high.
Another point about IPOs: the main IPO ETF, the Renaissance Capital IPO ETF is up over two percent this morning, largely due to the huge 24 percent move in Twitter, which is about 9 percent of the weighting of the IPO, and just reported solid earnings. The IPO hold 66 of the most recent IPOs.
--By CNBC's Bob Pisani