Market Insights

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Sizing Up the S&P 500

• S&P 500 stalls under 50-day MA, April 12 (weekly) close
• Potential bearish flag forming
• January 31 close of 4845 could become relevant
• Potential risk into CPI on May 15, with Cleveland Fed Nowcast at 3.5% (headline y/y)

Key News

• Economic picture potentially darkens: weaker demand and growth but higher inflation
  • March JOLTS job openings hit 3-year low, missing estimates
  • April ISM manufacturing index shows price-index spike despite falling into contraction
  • March construction spending -0.2% vs +0.3% estimate. Private construction shrinks
  • Q1 employment cost index +1.2% vs +0.9% estimate
  • Q1 GDP +1.6% vs +2.5% estimate. Core PCE y-o-y +3.7% vs +3.4% estimate
• Some corporate earnings show weakening demand: SBUX, NCLH, MCD, MAR, CAT
• Observation: Much of the recent strength in hiring and construction have been public/government or non-cyclical like healthcare.
• U.S. Treasury raises Q2 debt issuance estimate from $202bln to $243bln
• Goldman Sachs, UBS get more positive on China as Beijing takes favorable steps after years of stock-market crackdowns.
  • CVS has biggest 1-day drop since 2009 on medical costs
• Crude oil inventories +7.4mln vs -2.3mln estimate

Mover of the Week: Trip.com

• Chinese online travel agency with 105% revenue growth last quarter
• Earnings, revenue beat on 2/21
• Beijing is trying to promote domestic tourism
• TCOM +35% YTD

Upcoming Events

• Earnings tonight: AAPL, DKNG, COIN, AMGN
• Fri 5/3: Employment situation, ISM services
• Tue 5/7 earnings: DIS ANET
• Wed 5/8: EIA crude oil inventories
• Thu 5/9: Initial jobless claims

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