New Orders and Investor Sentiment Cools

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Economic Report Monitor #27
May 4th, 2020

 Stocks continued the bearish fall on Friday at the start of the week as the COVID-19 infections stall at about 2-3% in the US. Along with only small signs of improvement, new factory orders data was released and continued to frame the economic slowdown. Manufacturers saw a drop of -10.3% in new orders as demand for durable goods crumbled. Declines in the industry were highest as transportation equipment, down -41.3%, dragged it down -14.7%. Other sizeable drops were seen in Primary metals, down -2.8%, and mining, oil field, and gas field machinery, down -7.2%. Shipments also fell -5.2% with transportation equipment and petroleum industries weighing down the overall index.

The final indicator of the day was the Investor Movement Index from TD Ameritrade. In April, the index fell -6.25% to 3.9 as exposure to equity markets dropped. However, overall clients were net buyers for the 2nd month in a row. Buying was heaviest in weak sectors like Industrials and Consumer Discretionary. Volatility fell considerably but was still relatively high historically. The NASDAQ performed the best in April with Technology looking to be the most resilient amid the COVID-19 outbreak.

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