US Stock Market Q1 GDP Range and Market Reaction Expectations I noticed many friends asking about GDP data today. I remember writing an article about it before, but I can't seem to find it, so I'll rewrite it. The release time for the US Q1 GDP is 8:30 PM Beijing time on Wednesday. Last Friday, the market expectation was still 0.4%, but as of today, the market expectation has dropped to 0.3%. So, what GDP figure would boost market sentiment, and what figure would dampen it? Here’s my personal judgment, which only represents my own opinion and may not be correct. Please do not hold me accountable. 1. Extremely Positive: This is very difficult to achieve. It would mean exceeding or at least matching the GDP of Q4 2024, which is 2.4%. If such a figure is released, there would be almost no need to worry about a US economic recession. However, current expectations are far below this level. 2. Moderately Positive: If the GDP figure exceeds 1%, it would indicate that the US economy is maintaining low-speed growth. Although this is a significant drop compared to the previous value, it could still make the market believe in the possibility of a soft landing. Moreover, such low-speed growth might not even exert inflationary pressure. 3. Slightly Positive: If the GDP figure is below 1% but meets or exceeds market expectations, it would still fall within the range of low-speed growth. However, investors might lack confidence in a soft landing, and tariffs might still be needed to adjust sentiment. 4. Mixed Sentiment: If the GDP figure falls below expectations but remains positive (greater than zero), it would not be favorable for market sentiment but would not yet lead to pessimism. If Trump implements new policies or the Federal Reserve preemptively cuts interest rates, it could still help market sentiment. 5. Negative: If the GDP figure is below zero but higher than -1%, the market might start entering a phase of trading for a recession. This would not be good news for investors. For example, if US stocks decline today, it might indicate that investors are taking risk-averse actions. In this scenario, the Federal Reserve might start cutting interest rates as early as June to try to stave off a recession. 6. Highly Negative: The greater the negative value, the more it would hurt market sentiment and induce panic among investors. Unless the White House or the Federal Reserve steps in to reassure the market, expectations of a recession might intensify. In this case, the Federal Reserve might directly proceed with rate cuts to mitigate the damage. PS: Currently, the GDPNow forecast is -2.5%. This data is from last Thursday. A new version will be updated early Wednesday Beijing time. Even if gold imports are excluded, the US Q1 GDP forecast is still -0.4%. All the above content represents my personal views, which may not be correct. Also, just because I think a figure is negative doesn’t mean the market will crash. Everything depends on the market's reaction. Additionally, there’s no need to question the final GDP figure, whether it’s high or low. It’s not something we can change. As long as the Federal Reserve and the White House believe in it, that’s enough. This post is sponsored by @ApeXProtocolCN | Dex With ApeX