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Morning Notes — Data that Matters

Data that Matters

April 15, 2020

Data: 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 week and 6.867MM in the prior week. The absolute numbers are extremely high, but any sign of a plateau will likely carry more influence than further deterioration. China March activity data due Friday has consensus looking for Industrial Production -6.5% and retail sales -10%. China Q1 GDP is also due Friday morning with consensus looking for -5%.

SPX: Yesterday’s rally failed to break through near-term technical resistance of ~2840-2850. A market technician will now tell you the odds now favor a period of consolidation/base building before moving higher. But given stretched sentiment/positioning indicators, bond yields at ~0.70% and record policy support, expect the SPX to be highly influenced by positive developments on infection rates, testing capacity, treatment efficacy and any plan to ease lockdown measures. The new case trajectory in the US most closely tracks Italy’s curve, so any easing of lockdown measures there will likely play well here. Ultimately, it would be normal for the SPX to build a base around ~2450, but conditions are far from ‘normal’ and near-term risk remains skewed to the upside.

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