Most of the ‘hard data’ is still aligned with a resilient growth backdrop, but sell-side firms have reduced their US GDP estimates for ’25 based on bleak consumer sentiment and downbeat purchasing manager surveys.
US money supply growth has risen from -4.7% last April to +3.9% in February and looks to be accelerating.
The relief rally is showing signs of fatigue as the demand from quarter-end pension fund rebalancing begins to fade.
The SPX has rallied ~4.5% from the March 13 low into the ‘breakdown zone’ between 5765-5910.
Last week’s small gains in the SPX and Nasdaq 100 (NDX) were largely driven by the absence of incremental tariff headlines, oversold conditions/cleaner positioning, better-than-feared macro data and mostly dovish Fed takeaways.
US economic sentiment continues to deteriorate faster than the hard data.
Last week, the SPX rebounded from the 5500-5560 support layer that contains the 52-week Volume-Weighted Average Price (VWAP) for the S&P 500 (SPY).
Today’s relief rally from deeply oversold levels follows some positive policy developments.
Downbeat consumer surveys and recent market moves have led to increased recession fears.
Over the last two years, Truflation, a private company that provides real time/high frequency inflation data, has generated inflation forecasts that lead official BLS CPI data with a 0.1% average deviation.
