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April 2021

When the Stimulus Tailwinds Fade

Prologue Big numbers are showing up in U.S. economic data, partly due to the low levels of economic activity a year ago, partly caused by the reopening, and partly caused by the generosity of Uncle Sam.  We’ve had three helicopter money drops, two of them in 2021.  The economy is rapidly reopening as seen from the latest OpenTable data which shows U.S. restaurants in late April down -20% to -30% …Read More

U.S. Data Says “Boom:” Part Base Effect, Part Transient, Part Real

Prologue The much anticipated economic boom has finally arrived!  The NY Fed Weekly Economic Index exploded to the upside in late March and early April (see chart above).  Retail Sales were up an amazing +9.8% M/M in March!  That number is not Y/Y.  The Y/Y number was +27.7%, but was greatly influenced by depressed Retail Sales last March when the economy was beginning to shut down.  April’s Y/Y number will …Read More

Incoming Data Looks Robust – It’s A Mirage

Incoming PPI data marked the initial volley of the oncoming “siege” of inflation data. Despite reopenings, state Initial Unemployment Claims spiked as March ended.  Either the reopening lags are longer than we thought, or disincentives from overly generous benefit payments are at play. If recent history is any guide, only part (25%) of the stimulus cash will be spent on consumption, the remainder saved or used to reduce debt.  Business, …Read More

The Reopening High – Long-Term Issues Quite Concerning

The big news of the week was always going to be the monthly BLS Employment Surveys.  It was destined to move markets one way or the other, and since the +916K number from the Payroll Report (+1,072K if the +156K revision to February is included) significantly bested the 660K-675K consensus that was in the market, the equity markets are likely to move higher in the short-term, as is the longer …Read More