• The April jobs report was weaker than anticipated, raising expectations for a Fed rate cut by September.
  • Nonetheless, hiring continues to be robust, with April marking the 40th consecutive month of job gains exceeding 100k.
  • A chart from the San Francisco Fed has been making rounds on social media.– US households have run out of excess savings

 

 

  • US wholesale durable goods inventories-to-sales ratio has been rising.

 

 

  • The GDPNow model forecasts over 4% growth this quarter (annualized), driven by robust consumer spending (“PCE”), inventory rebuilding, and investment.
  • Mortgage applications remain well below last year’s levels.
  • Initial jobless claims jumped last week, sparking concerns over potential weaknesses in the labor market.
  • A substantial portion of the increase originated from New York State. New York City public schools had their recess last week. During winter and spring breaks, public school employees, including bus drivers, can file for benefits, often increasing weekly claims.

 

 

  • The probability of two Fed rate cuts this year increased in response to softer labor market data

 

Market Data

 

  • Key US indices are testing resistance at the 50-day moving average.

 

 

  • Only 15% of S&P 500 companies provided guidance that exceeded estimates. Solid earnings beats might not suffice to sustain the stock market rally as the focus shifts toward profit forecasts

 

Source: @markets   Read full article

 

  • The ability of US firms to maintain strong margins continues to exceed expectations.

 

  • Flows into US tech funds persist.

 

Source: Deutsche Bank Research

  • Goldman expects share buybacks to accelerate.

 

Source: @markets   Read full article

 

  • This chart shows the percentage of members in each S&P 500 sector that are above their 200-day moving average.

 

 

 

 

  • The pandemic winners have struggled since the end of 2020.

 

Source: @financialtimes   Read full article

 

  • The 10-year Treasury yield is testing the uptrend support.

 

 

Great Quotes

 

“Be yourself. Everyone else is already taken.” – Oscar Wilde

 

Picture of the Week

 

Spring tulips.

 

 

 

All content is the opinion of Brian Decker