US Q1 GDP Sags To -5% QoQ Annualized As Virus Lockdown Helps Crush Economy (Corporate Profits Shrink 14% In Q1)

Oof.

US GDP growth QoQ annualized plunged to -5% in the first quarter. Still not to the depths of The Great Recession (aka, housing bubble burst and ensuing financial crisis).

But you ain’t seen nothing yet.

The Atlanta Fed GDPNow estimate for Q2 GDP is -41.907%.

Why will Q2 look like a disaster? Take a peek at April’s preliminary durable goods orders: down -17.2%. Take out transportation and the decline is “only” -7.4%. In other words, the print (actual) are lower than the surveys. And while jobless claims clocked in at 2.12 million, it is the first decline in jobless claims so far.

Corporate profits shrank by 14% in Q1.

Mortgage REITs Collapse By More Than 50% Before Slight Rally

Mortgage Real Estate Investment Trusts (MREITs) got clobbered starting February 20th and declined by over 50% before a small rally after the Fed/Congressional bailouts.

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Year-to-date, mortgage REITs are down over 50%.

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The Fidelity and Vanguard bond indices didn’t plunge as far and had a better rebound effect after the bailouts.

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Equity REITs had a plunge and rebound similar to the Dow.

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Mr. Freeze is still around for mortgage REITs.

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