MTS Insights

Economic Report Monitor #25 April 30th, 2020 From MarketWatch It's yet another Thursday, and that means jobless claims for the last week of April. Initial claim applications were still bustling, up 3.84 million, just above the first week of 3 million+ initial claims in March. Insured unemployment grew to 12.4%. The increase in total insured unemployment was a bit slower than the pace of the previous week's increase in initial claims suggesting some people coming off unemployment in addition to people coming on. Michigan remains the state with the highest insured unemployed at 21.8% as durable goods spending takes a hit troubling the local auto industry. Those jobless claims are looking to fill the gap of a -2.0% drop in personal income as reported by the Bureau of Economic Analysis. That drop was mostly caused by a decrease in wages and salaries, down -3.1% as businesses are forced to furlough and layoff workers. The loss in income contributed to a personal consumption...

Economic Report Monitor #24 April 29th, 2020 Midway through the last week of April, investors got a good look into the COVID-19 economy with the first estimate of 2020 Q1 GDP and an FOMC announcement on top of other smaller reports. Markets opened higher and stayed higher all-day. Companies continued to release earnings seeing major declines in revenue and profits including Boeing which saw a $641 million loss. This trend was supported by the April version of the Atlanta Fed's Survey of Business Uncertainty which saw expected sales growth plummet -53.7 pts to -0.3. Employment and capital investment expectations also fell but not as quickly. However, if sales uncertainty prevails for some time, cash flow problems could bleed into employment and capital investment pessimism. From ZeroHedge Earlier in the morning, the first GDP estimate for 2020 Q1 was released at -4.8%, most likely the beginning of a recession caused by COVID-19. Most notably, the driver of GDP growth in t...

Economic Report Monitor #23 April 28th, 2020 Store Visit Conversions from Online Ads Drop 90% as Retail Businesses See Traffic Plummet A few advance economic indicators came out today. The report, which is usually quiet, showed some movement should be expected in future March reports for international trade and wholesale/retail inventories: The trade deficit grew 7.2% in March according to an initial estimate. Exports fell -6.7% as the economy started its lockdown towards the end of the month. The largest decrease was in auto vehicles which dropped -17.8% as demand for durable goods dried up as seen in other reports. Industrial supplies, including petroleum and petroleum products, fell -7.5%. Food, feeds, and beverages, likely deemed essential, saw only a -0.1% drop. Imports of vehicles also saw a large drop at -9.0%. Foods, feeds, and beverage imports were unsurprisingly higher up 3.4%. Wholesale inventories saw a drop of -1.0% while retail inventories grew 0.9% in March....

Economic Report Monitor #22 April 27th, 2020 The last month of April opens with just one economic report from the Dallas Federal Reserve. Another April manufacturing survey relays the economic slowdown once again with general business activity down to -73.7 on large drops in production (-20.0 to -55.3), capacity utilization (-21.1 to -54.5), new orders (-25.7 to -67.0), and shipments (-22.8 to -56.6). Most inventories were flat with 52.2% reporting no change. Prices paid and received were also lower but more stable than anything; in both categories, more than 65% of respondents reported no change. Current capital expenditures dropped significantly, down -20.0 to -54.3. This is far different from the forward look at capital expenditures which actually increased 0.1 to -19.7. Similarly, views of other categories saw mixed changes with growth in new orders, shipments, and employment. These results continue the trend of outlook responses being much more optimistic than current response...

Economic Report Monitor #21 April 24th, 2020 From TradingView The stock market appears to have entered a bit of a lull after some intense volatility. The Dow drops 2% after a mostly bearish week is offset by modest gains on Friday. Both bears and bulls now sit looking at a consolidating trend where momentum could build in either direction. Shares of the popular S&P 500 ETF (SPY) closed down -1.32% for the week but with volume falling to its lowest level since the near-term bottom around $225. While investors lie and wait for the next move, economic data gauging the damage to the economy since the lockdowns began continues to be released. Durable goods were always going to be impacted heavily by the lockdown since several of the segments are considered nonessential. New orders for March fell -14.4% with shipments slowing -4.5%. The largest drop was seen in transportation equipment dropping -41.0% with motor vehicles and parts down -18.4% and nondefense aircraft and parts fa...

Economic Report Monitor #20 April 23rd, 2020 It's Thursday, so that means another jobless claims report came out detailing the crash in employment that the lockdowns have caused so far. Initial claims last week grew 4.43 million as the backed-up unemployment system continues tackle applications. Insured unemployment rate is at 11.0% and will add more next week with the new initial claims. It does look like there is a bottom in new claims which probably would have been deeper if the system didn't back up like it did. In total since March 14th, 26.5 million initial claims have been reported which suggests 16.2% of the labor force is seeing an impact from the lockdown. Major equity indexes still closed in the green. Two more PMIs came out today as April reports start to make their appearances. The IHS Markit Flash US Composite PMI was quite striking. New series lows came in for the Flash US Composite Output Index at 27.4 and the Flash US Services Business Activity Index at 2...

Economic Report Monitor #19 April 22nd, 2020 Midway through the week, markets stabilize slightly after trading in commodity and equity markets open the week in volatility. Economic indicators reflect that as well as a couple of quiet reports come out during the pause. The volatility feels in no way over though as policymakers start to ponder the reopening process. These plans for easing the lockdowns will come on the backs of a fresh new stimulus bill passed through the Senate already mainly focused on bolstering the Paycheck Protection Program. The first report this morning was another week of MBA Mortgage Applications. The composite index came in at a flat -0.3% as the Purchasing index grew 2.0% and the Refinancing index fell -1.0%. Mortgage rates sit just above the lows with the 15-year fixed rate at 3.22% and the 30-year fixed rate at 3.62%, up 24 basis points and 17 basis points off the 52-week lows. Data will probably start to trend downward as homebuyers see their economi...