Around 9:30 every morning I do an initial check of where my stock positions are for the day.  During today’s check though, I got a nasty surprise.  My positions, which had been been posting nicely higher this week, were all down. What gives!?

Turns out the culprit was snow. We knew the first quarter of 2014 was not a great one for the economy (or my heating bill), as the never ending snow kept consumers out of stores. Many retailers posted lower than expected first quarter results due to the extreme weather conditions of Jan-Mar.

However, this morning the Commerce Department released the final figure of gross domestic product (GDP) growth in the first quarter. GDP is the cash value of everything the US produced over the period. Originally GDP was estimated to have shrunk at about a 1% annualized rate over Jan-Mar this year, but turns out GDP actually shrunk a whopping 2.9% annualized rate.

Not only was this a hugely negative surprise, but this represents the worst GDP growth rate for the quarter since 2009, in the height of the recession. The main reason GDP growth was so bad was because of consumer spending hits (again from people not wanting to leave their houses in a snowpocalypse). Consumer spending was up just 1% in the first quarter, a steep drop from the 3.3% growth rate in the fourth quarter of 2013.

So what does this all mean? My two cents is that this really won’t have much of an impact after this week. Again, this news doesn’t actually mean anything changed. The bottom line impact of these figures already occurred back in the first quarter. Since public companies have already reported their Jan-Mar quarter earnings reports, the slowed consumer spending impact should have already been priced into securities.

Once the initial shock of the downward surprise sinks in, the market should stabilize. And optimistically, economists forecast the economy will expand at about a 3.5% annual rate in the second quarter. In the meantime, hopefully this rallies global climate change response.  

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