Tomorrow brings weekly jobless claims with consensus looking for 4.25MM vs 5.245MM last week. There’s no debate that the global economy is in free-fall, but tomorrow’s April flash PMI data (Japan, UK, Eurozone and US) might give us a sense for the bottom and maybe
From an equity perspective the most important piece of data is still weekly jobless claims report announced Thursday mornings. Thus far, the peak in claims was March 27 with 6.867MM. Last week, claims came in at 5.2MM and consensus is looking for 4.5MM this Thursday.
As discussed on Friday, the main driver behind the rally to date is extremely light equity positioning among all investor categories. Individuals, long-only managers, hedge funds and systematic strategies (CTAs, Vol Targeting etc) are all underweight equities. The initial ~17% bounce off the 3/23 lows
Equity positioning remains extremely favorable and should keep the balance of risk skewed to the upside. As I alluded to in the Snapshot section above, there are early signs of systematic funds returning to equities. These strategies (mainly CTAs and Volatility Targeting ) are heavily
• Some focus on a deceleration in weekly jobless claims that came in at 5.245M vs 6.615M last week and below consensus for 5.803M. This is still a huge number, but suggests a possible plateau ahead of the most dire predictions for a peak near
Weaker than expected US economic data gets credit for today’s reversal but the more important reports are tomorrow’s release of weekly US jobless claims and Friday’s release of China March activity data. Consensus is looking for ~5.5MM claims, which would be down from 6.606MM last
At current levels, the S&P 500 is near the upper-end of a fairly easy-to-identify technical resistance zone of ~2750-2840. At the moment, the SPX is being driven by a sentiment and positioning-driven pain trade that could easily overwhelm overhead technical supply.
Market participants typically begin using forward-year SPX EPS estimates around the middle of the year, but that process may begin sooner given current circumstances. The 2021 SPX EPS estimate is now ~$172 but expected to change as we get into Q1 earnings season. The forward
Next Tuesday kicks off the CQ1 earnings season with the first few days mostly focused on results for large US banks. For the last several years, investors have paid attention to bank Net Interest Margins, loan growth and trading income. However, the attention will now
Yesterday’s late afternoon fade in the S&P 500 had the index closing at 2659, which just happens to be inside our previewed technical resistance zone of 2650-2665. But the fade into the close probably looked worse than it felt as sector dispersion favored cyclically-sensitive groups
