Here Come The Q2 GDP Downgrades

We just got some slightly nasty consumption readings for May. Personal spending climbing just 0.2%, with real services consumption declining 0.2%.

Analysts have updated their growth tracking models for Q2 accordingly. The results aren't good.

Barclays' is now showing 2.9% annualized Q2 growth, down from 4% in its most recent reading.

"On balance, this report suggests a more modest rebound in Q2 consumption growth following a softer Q1 than we had previously expected," they write.

TD Ameritrade's Eric Green also saw his estimate drop to 3% from 3.6%.

"While there is plenty of scope for upside surprise on the inventory build and net exports on the quarter, the risks at this point tilt to 3.0% or lower rather than higher," he said in a note.

Bank of Tokyo-Mitsubishi's Chris Rupkey says the data show the Q2 snap-back may be more of a tap-back.

"Consumer spending was knocked back big from 3.1% to the slow-growth zone of 1% yesterday for the first quarter," he wrote in a note. " The second quarter bounce from the cold winter weather is not yet evident as spending is running just 1.2% through May. Don't start betting on those 3% GDP numbers yet, but the report on July 30 will have the annual benchmark revision so the story could still change."

Markets are sliding.