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It looks like the second quarter is going to be just another period of slow growth in the United States.
Despite high hopes that gross domestic product gains might approach 3 percent, recent data indicate that the number, which will be reported Friday, will be considerably lower.
The Atlanta Fed, in its closely watched GDPNow indicator, on Thursday cut its forecast to 1.8 percent, a sharp reduction from the 2.3 percent expectation just a day earlier. Wall Street economists project the number to come in around 2.6 percent, according to FactSet.
If the Fed number is correct, that would put average growth for the first half of 2016 at just 1.45 percent, and just shy of 1.6 percent over the past four quarters.
As recently as May 31, the Fed tracker was looking for a growth rate of 2.9 percent, but that's been on a steady decline since.
It was the second time this week that the indicator fell; the first was Wednesday after durable goods orders came in lower than expected, while Thursday's reduction was based on the first release of the U.S. Census Bureau's new advance economic indicators report, which logs retail and wholesale inventories as well as foreign trade in goods.
Atlanta Fed officials noted that the report showed negative impacts from exports and inventory investment.
The cut comes a day after the Federal Open Market Committee, the central bank's monetary policymaking arm, issued a more optimistic outlook on the economy.
Despite the fairly positive FOMC language, particularly on the labor market, traders anticipate only a slightly higher chance of a rate hike in 2016 than they did before the meeting. The fed funds futures market now indicates a 24 percent chance of an increase at the September Fed meeting, and a 50.5 percent chance of a move by year's end.
A blue-ribbon panel is proposing a bevy of reforms that it hopes will restore confidence in the stock market.
Responding to charges of a "rigged" market and propelled by some highly publicized malfunctions, the Committee on Capital Markets Regulation released a laundry list Thursday of changes it believes will make the market function better.
"Flash Boys" author Michael Lewis famously made the "rigged" accusation following the 2014 publication of his book that detailed the crusade of upstart exchange IEX to counter high-frequency trading strategies. HFTs use computers to trade in milliseconds. They've often been faulted for market problems, with the book detailing the measures HFTs go through to gain advantages over competitors.
The committee said it does not believe Lewis' claim is accurate, but acknowledged the market is in need of some basic structural reforms.
"Although our markets are not rigged, there is clearly room for improvement," Hal Scott, a renowned Harvard professor who chaired the committee, wrote in an essay that accompanied the 180-page report. "And our blueprint provides the SEC with the direction that it needs to unleash the benefits of a resilient, transparent and competitive stock market."
The panel consisted of executives across Wall Street. Members include hedge fund titan Ken Griffin at Citadel, Kenneth Bentsen Jr., who heads the Securities Industry and Financial Markets Association, and multiple representatives of trading firms and Wall Street investment banks.
Recommendations were designed to address three broad issues: increasing transparency so investors have a clearer idea of what's happening in the market with regard to pricing; "strengthening resiliency" so that damage from episodes like the March 2010 "Flash Crash" and the Aug. 24, 2015 event where half the S&P 500 stocks didn't open on time is minimized; and reducing transactions costs.
Among the proposals: Increased disclosure on trading activities, quicker triggering of "circuit breakers" that halt trading during unusual activity, and a top-to-bottom review of fees and pricing.
One recommendation in particular, that exchanges be forced to reduce the fees they charge brokers, would save investors $850 million a year, the report said.
Scott specifically said the changes were inspired by "Flash Boys" and follow some recommendations made by IEX.
However, he also said some of the concerns about the market are misplaced.
For instance, Scott said strategies employed by high-frequency traders, such as trying to capitalize on discrepancies in price spreads for individual stocks, "are just modern versions of traditional market making and arbitrage strategies that have always existed and provide important benefits to investors."
The report also said that "dark pools," or trading venues operated away from public exchanges, actually help save investors money through better pricing.
"We find that even during times of crisis there is limited empirical evidence that HFT strategies contribute to price declines, with the majority of studies finding that HFT strategies help stabilize prices during a market crash," the report said.
The authors said most of the recommended changes can be implemented by the Securities and Exchange Commission, though a few will require legislative action.
Most investors would agree that it's a jungle out there. But for hedge funder Dan Loeb's firm, it's more like a titanic, medieval battle between warring families seeking power and dominion over all.
A bit dramatic, perhaps. But Third Point believes there's a legitimate parallel between investing in the current tumult and the plot intrigue surrounding the HBO program "Game of Thrones," which is popular generally but approaching cult status on Wall Street.
Specifically, the firm compares the market to the "Battle of the Bastards" episode, in which (spoiler alert) House Stark's rule over the North is restored.
"Surging enemies forming a seemingly impossible perimeter, a crush of fellow soldiers on the field, arrows coming in overhead, and the need to avoid panic and deftly use sword and shield to fight your way out of a seemingly impossible situation is a good analogy for the emotional experience of managing assets since last summer," Loeb and Third Point wrote in the firm's latest letter to investors.
While Lord Ramsay Bolton came out on the short-end of the battle in question, Third Point has managed a better outcome.
A correct pivot following the Brexit vote in June, not following the crowd at a time when doing so has been terribly wrong and continued success with an activist position in health care products provider Baxter are three of the strategies that have allowed Third Point to put together gains overall this year, including a second quarter that beat the S&P 500.
First-half returns for the firm were 2.2 percent compared with 3.8 percent for the index, while the second-quarter gain came in at 4.6 percent compared to 2.5 percent for the index.
Third Point said it holds "a constructive long equity position, a sovereign debt investment, high-yield debt investments in energy companies, an event-driven long position and a short equity position in the pharmaceutical industry."
The firm remains "constructive" on equities, with a stock portfolio position as high as 55 percent.
"While observers claim the S&P is expensive, its dividend yield is currently greater than the 30-year bond yield, a relatively rare occurrence not seen since 2009," the letter said. "The dollar's strength earlier this year had weakened overall S&P earnings, and when combined with its softening, the Fed's signals that another rate hike this year is unlikely, and tailwinds from low energy prices, we expect to see earnings improve in the second half.
"Share buybacks and M&A remain robust. Viewed from this perspective, alongside the observation that very few other asset classes or regions offer more attractive returns, we are content to have our capital in a well-diversified portfolio of U.S-centric credit and equities."
The success of the Brexit vote shouldn't have been as big of a surprise as it was, the firm said, adding that it quickly covered shorts afterwards, added to longs and built some new event-driven positions in Europe.
"The idea that the outcome was unforeseeable is incorrect — the polls correctly forecast a coin flip — but elites dismissed the possibility," Third Point said. "There is a lot to learn from this group-think pitfall, which we nearly fell into ourselves."
—CNBC's Kate Kelly contributed to this report.
A recent spate of positive data has heightened hopes that the U.S. economy is vanquishing its many demons.
Whether it was the blockbuster June payrolls number, the strong retail growth earlier this month, or something more recent such as Tuesday's reported
That's got Wall Street excited that after a long period of mediocrity, the economy finally may have reached an inflection point. However, the optimism may not be on particularly solid ground, with the economy likely still trudging along despite some recent positive surprises.
The Street closely follows a barometer called the Citi U.S. Economic Surprise Index. The measure is different from others in that it depends less on what the actual data readings are and more on how they compare with expectations.
A reading above zero means that the data on balance are coming in above expectations, while a negative reading indicates an economy that is underperforming. Lately, indicators have been crushing estimates, after the index spent a year and a half in negative territory. Paul Hickey at Bespoke Investment Group noted in a tweet Tuesday that the index is in clear "breakout" mode as judged by its behavior over the past 12 months:
Periods when the index rises into positive territory often are positive for stocks. Over the past decade, the S&P 500 was higher 79 percent of the time with a median gain of 5.2 percent six months after periods when the surprise index rose above zero, according to Burt White, chief investment officer at LPL Financial.
"We have also observed better performance from the more economically sensitive sectors in these scenarios. Both good signs," White said in a note to clients.
A few words of caution, though, are warranted before getting too excited about this "surprise."
Most notably, the breakout that Hickey observed came in early July and coincided with the realization that the Brexit vote would not, in fact, be the end of the world. A look at the index from the beginning of July tells the story:
Federal Reserve officials this week likely will point to growing signs that the economy is improving enough that at least one rate hike will be warranted by year's end.
But it might not matter what they say. Investors increasingly are tuning out the central bank.
2016 has been a rough year for monetary policymaking, with the Fed's credibility strained enough that the market has become more prone to take a "we'll believe it when we see it" attitude when it comes to moves in interest rates.
"Their credibility is very, very low," said Dan North, chief economist at trade credit insurance firm Euler Hermes North America. "The financial markets are not giving a lot of credence to what the Fed is saying, and rightly so."
Despite chatter from central bank leaders and speculation from the financial press about looming hikes, the market is becoming pretty immune to Fed saber-rattling.
Indeed, just seven months ago, the Fed was prepping investors for four rate hikes this year. Now the market is pricing in only a 2.4 percent chance of a move this week and a fairly low likelihood farther down the road.
When it came to the surprise Brexit vote, Wall Street banks (and traders) assumed the worst.
After the vote in June rocked markets, it is almost equally surprising to hear top Wall Street executives talk about the impact of the U.K.'s decision to quit the European Union in such rosy terms.
"Britain's decision to leave the European Union created uncertainty that is likely to persist for some time as the market grapples with the political and economic paths forward," Gorman said on the bank's earnings call. "We consider this outcome suboptimal but it did provide a live stress scenario."
It also sounds like it gave one Morgan Stanley business a short-term shot in the arm.
Currency trading "was aided by the volatility we saw from Brexit," the bank's CFO, Jonathan Pruzan, said on its earnings call.
At Wells Fargo, some executives are seeing silver linings in other businesses despite the turbulence created by the Brexit.
"Since Brexit and the related decrease in mortgage rates, we've seen refinance activity increase with our retail application volumes up approximately 15 percent to 20 percent in recent weeks and we currently expect origination volume to be somewhat higher in the third quarter compared with the second quarter," John Shrewsberry, Wells' finance chief, said on the bank's earnings call last Friday. He later added, "It's a great time to be a borrower."
The speculation comes amid a fresh round of criticism the outspoken New York businessman has lobbed at the Fed.
The commodity's prices could quickly dive to $40 or lower if OPEC members leave Algeria on Wednesday without any promise of a deal.
Many on Wall Street agree with Donald Trump's criticism that the Fed waited too long to raise rates.