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Rally Feels Like Too Far Too Fast, Economic Data Useless

Rally Feels Like Too Far Too Fast, Economic Data Useless
Image by Negative Space – Pexels account

With the markets shut down for Good Friday, prior to Easter Sunday, maybe it’s a good time to reflect on where we’ve been over the last few weeks, and where we are going.

Equity markets in the United States have rallied 20% off the WuFlu lows and the S&P 500 closed at almost 2800 yesterday.

We realize markets look forward, and obviously the market is trying to look past the Chinese coronavirus epidemic and to an America economic recovery. However, we feel this is too far too fast and could be a short squeeze, as large players are forced to reduce their bets against a deep recession.

There is much bad news yet to be released — the actual depth of the downturn, but also, the length of the recession. That is what is most important.

It is highly likely we could retest the March lows.

There is also much more to come out of Congress; however, small businesses have still not been helped to any degree, despite all the hype of ‘phase three’ and the Paycheck Protection Program. Most have not received any money. Many still can’t apply. As we have said before, it’s not going well out there Mr. President.

The economic data released over the last few days has been irrelevant, as everyone knows its going to be bad, even if its not showing in the numbers yet.

Consumer Price Index (MoM) (Mar) printed today at-0.4% vs -0.3% consensus estimate.

Consumer Price Index ex Food & Energy (MoM) (Mar) printed at -0.1% vs 0.1% estimate.

Consumer Price Index (YoY) (Mar) printed at 1.5% vs 1.6% estimate.

Consumer Price Index ex Food & Energy (YoY) (Mar) printed at 2.1% vs 2.3% estimate.

Consumer Price Index Core s.a. (Mar) printed at 266.8.

Consumer Price Index n.s.a. (MoM) (Mar) printed at 258.115 vs 258.2 estimate.

Producer Price Index (YoY) (Mar) printed yesterday at 0.7% vs 0.5% estimate.

Producer Price Index ex Food & Energy (MoM) (Mar) printed at 0.2% vs 0.

Producer Price Index ex Food & Energy (YoY) (Mar) printed at 1.4% vs 1.2% estimate.

Continuing Jobless Claims (Mar 27) printed at 7.455M vs 8M estimate.

Producer Price Index (MoM) (Mar) printed at -0.2% vs -0.4% estimate.

Initial Jobless Claims (Apr 3) printed at 6606k vs 5250k estimate.

Wholesale Inventories (Feb) printed at -0.7% vs -0.5% estimate.

Michigan Consumer Sentiment Index (Apr) PREL printed at 71 vs 75.

EIA Natural Gas Storage Change (Apr 3) 38B vs 24B estimate.

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