Negative economic data will trigger reset lower

International trade data for March is released Tuesday at 8:30 am. Econoday consensus is calling for March’s reading to be $-44.0 B. February’s results were $-39.9 B. Also on Tuesday, we receive the ISM Non-Mfg. Index reading for April. Econoday consensus is calling for a reading of 37.9 versus the prior month’s reading of 52.5.

The ADP Employment Report for April is due Wednesday. The monthly results will be stunning – unlike anything we have ever seen. April ADP/Econoday Consensus is calling for -20,000,000 jobs.The ADP Report, rightly or wrongly, is often looked upon as a precursor for the monthly Employment Report that follows on Fridays. These results will likely fuel a tailspin in investors’ outlook that could trigger a reset lower across the market – simply due to the magnitude of job losses. The EIA Petroleum Status Report for the week ending 5/1 is released on Wednesday as well. The prior reading reflected a relatively mixed supply/demand picture given all of the turmoil in global financial and energy markets. Crude oil inventories rose 9.0 M barrels, gasoline inventories tightened modestly by -3.7 M barrels, and distillate inventories rose 5.1 M barrels.

The Weekly Jobless Claims data for the week ending 5/2 is released Thursday morning. As you certainly recall, last week’s report reflected a weekly jobless claims figure of 3,839 K. The four-week moving average stands at a staggering 5,033 K. This week’s report is expected to reflect a drop of 603 K claims.

There is no way around this. April Employment Report/Econoday Consensus is calling for -21,250,000 jobs. Between the ADP Report on Wednesday and this April Employment Report due Friday, the magnitude of the COVID-19 fueled destruction to our economy will begin to take shape. Simply put, in our republic’s grand history, there has never been anything even remotely as devastating.

The unemployment rate is expected to leap to 16.3%. It only gets worse from there from a strictly data-centric stand point. Private payrolls, manufacturing payrolls, average hourly earnings, average work week, and the LFPR included in the report will all be chilling.


“Following last week’s passage of the $484 billion stimulus package and the anticipated gradual reopening of the global economy, investors have broadened their reach by dipping into mid- and small-cap stocks in general and cyclical sectors, such as consumer discretionary, financials, and real estate, in particular. The S&P 500’s 2.8% price rise during the first two days of the week was eclipsed by the 8.6% jump in the S&P MidCap 400 Index and 9.6% surge in the S&P SmallCap 600 Index. In addition, the S&P 500 Value Index’s gain beat that of the Growth Index by a more than 2:1 margin. From a technical perspective, a rise in total volume, along with further expansion in breadth, is needed for a sustainable move higher.” Sam Stovall, Chief Investment Strategist.

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Flickr photo: by John Spencer – Educator

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