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“There are no lines in nature, only areas of colour, one against another.” – Edouard Manet
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
April may only have 30 days, but this one feels like it was the longest month in a long time. Liberation Day was on April 2nd, but it seems like months ago. Maybe that’s because we have seen market moves that usually take months to play out compressed into just a matter of weeks. Thankfully, things have started to calm down, but you can never be sure if we’re past the worst or just in the eye of the storm.
Regarding economic data, the month is closing out with a whirlwind, and it started with the ADP Payrolls report which came in weaker than expected. While economists were expecting growth of 125K payrolls, the actual reading came in at just under half that at 62K. ADP was just the first of many, though, with the first read on GDP, the GDP Price Index, Core PCE, Personal Consumption and the Employment Cost Index all coming out at 8:30. GDP showed a slightly larger than expected decline (-0.3% vs -0.2%) and Personal Consumption was higher than expected, but the inflation readings came in much higher than expected which has pushed equity futures sharply lower and yields sharply higher.
As if these reports weren’t enough, we still have Personal Income and Personal Spending at 10 AM. That’s just economic news, too. Don’t forget that we’re in the thick of earnings season, and after the close today, the focus will be on Meta (META) and Microsoft (MSFT).
Did anything happen this month? Heading into the last trading day of the month, the S&P 500 is down less than 1%, five sectors are up, and six are down. At the surface, it sounds like an uneventful month, but it was anything but. The scatter chart below shows the performance of the S&P 500 and sectors on a month to day basis through April 8th and then from the close on April 8th through yesterday’s close. It has been a wild ride!
Along with the S&P 500, six sectors fell more than 10% through 4/8 and then rallied more than 10% since. Through 4/8, all eleven sectors fell at least 6.2% (Consumer Staples) and as much as 17.9% (Energy), and since then, every sector has rallied at least 4.6% (Health Care) and as much as 16.4% (Technology). In most cases, the biggest losers in the first eight days of the month have been the biggest winners since although Energy has been the exception, as its bounce was meager relative to the size of its plunge.
After all the noise, Technology is leading the way higher with a gain of 1.2%, followed by Communication Services (0.9%), Consumer Discretionary (0.8%), and Utilities (0.5%). On the downside, there are still plenty of losers, and the magnitude of the losses is much larger than the winners. Energy has been the big outlier with a decline of over 10% while Health Care (-4.7%), Materials (-2.7%), and Financials (-2.4%) are all still down over 2%. It hasn’t been a great month for the market, but it could have been a LOT worse.
