US Economy slower than expected in Q1

The United States Commerce Department reported that gross domestic product (GDP), a measure of all goods and services produced for the period, grew at an annualised pace of 1.1% in Q1, missing economists’ expectations of 2%, as private inventory investment declined and nonresidential fixed investment slowed. The report also showed that the personal consumption expenditures price index, an inflation measure followed by the Federal Reserve, increased 4.2%, surpassing the 3.7% estimate. However, stocks initially reacted little to the report, with major indexes pointing to a higher open, while treasury yields increased.

Consumer spending, as measured by personal consumption expenditures, rose 3.7%, and exports were up 4.8%, but gross private domestic investment fell 12.5%, taking 2.26 percentage points off the headline number. The slowdown in growth has been attributed to the decline in private inventory investment and the deceleration in nonresidential fixed investment. Economists have expressed that the US economy is likely at an inflection point as consumer spending has weakened in recent months.

Alternative investment manager Apollo has launched Apollo Clean Transition Capital, an investment strategy aimed at supporting firms’ clean energy transition, with a $4bn capital from Apollo affiliates and strategic partners. The new strategy will provide “competitive, flexible, and patient financing” through yield and hybrid investments targeting opportunities in areas such as energy transition, industrial decarbonisation, sustainable mobility, sustainable resource use, and sustainable real estate. This follows the establishment last year of Apollo’s sustainable investing platform, which focuses on financing and investing in the energy transition and decarbonisation of industry.

Argentina’s Economy Minister Sergio Massa has announced that the country will pay for Chinese imports in yuan instead of US dollars to preserve its dwindling foreign reserves. The South American country will be able to program a volume of imports in yuan worth more than $1bn from next month, replacing the use of Argentina’s US dollar reserves. Massa made the announcement at a meeting in Buenos Aires with China’s ambassador, Zou Xiaoli.