With the S&P 500 only having fallen roughly 1.3% since the last week’s sentiment survey from AAII, bullish sentiment has risen 4.66 percentage points to 34.4%.  While bullish sentiment among individual investors is higher, another reading of newsletter writers from Investors Intelligence saw bullish sentiment drop even further. 34.6% of respondents in that survey reported as bullish which is the lowest amount since the first week of last year. That is in the lowest 5% of all readings for that sentiment reading.

With bullish sentiment picking up, bearish sentiment fell though not by much. Bearish sentiment remains very elevated. For the second week in a row, over half of the respondents reported as pessimistic. That is the first time with back to back readings above 50 since March 2009. The Investors Intelligence survey also remains extremely bearish. 32.7% of respondents in that survey reported as bears which is the highest share since the first week of 2019 when that reading totaled 34.6%.

As for the AAII’s reading on neutral sentiment, for only the 28th time in the survey’s history going back to 1987, less than 15% are reporting neutral sentiment. Now at 14.5%, neutral sentiment is at its lowest level since November of 2010 when it had fallen to 13.95%. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Like a flopping wet fish, it’s been incredibly hard to get a hold on an accurate price of crude oil this week.  With a gain of 22.2% so far today, WTI is experiencing its largest one-day gain on record (dating back to 1983).  The next closest largest one-day gain was in December 2008 when crude rallied 17.8%.  While today’s gain is impressive, keep in mind that it followed yesterday’s decline of 24.4% which ranks as the third-largest one-day decline on record and last week’s 24.6% decline on March 9th. In fact, three of the four largest one-day percentage moves in WTI have all come in the last two weeks!

While a big gain in any asset class always leads to questions over whether it is the start of a new run higher, we would caution that following the prior nine largest one-day gains on record, crude oil’s median change over the next week was a decline of 4.4%. Start a two-week free trial to Bespoke Institutional for full access to our market and economic analysis.

Just one month ago, manufacturing businesses surveyed by the Philadelphia Fed indicated the most optimistic outlook since early 2017.  Throw in the massive impact of the coronavirus and in one month that picture has been completely turned on its head.  Falling from 36.7 last month to -12.7 this month, the headline index is now back to the same level it was at in July of 2012.

Each of the individual components also fell quite dramatically with all but two, Number of Employees and Average Workweek, falling by double digits. Not a single component rose this month with multiple components, in addition to the headline index, falling into negative territory. The worst decliners were those measuring demand as the indices for new orders and shipments were down sharply. Additionally, manufacturers have also seemed to have drawn down on existing business as inventories and unfilled orders are also down.

One of the key areas of weakness driving into the massive decline in the headline number this month was New Orders.  Last month, this index came in at 33.6 which was the highest level since May of 2018 and the fourth-highest reading of all months of the current cycle. Now at -15.5, this is the lowest level since June of 2012 and the third-lowest reading of the current cycle.

That 49.1 point decline month over month for new orders as well as the 49.4 point drop for the headline index are the largest monthly declines on record (chart below).  That seems to suggest that the shock to demand and general conditions reported by the region’s manufacturers has been more sharply negative than even any recessionary period in the past 52 years since the survey began.

While it did not tip into negative territory, shipments are also down sharply, falling 25.2 points to 0.2. That is the fifth largest month-over-month decline on record for this category. This seems to further reinforce the idea that demand has weakened dramatically over the past month.

Given the shutdowns that have taken place and the rise in jobless claims this week, it should come as no surprise that fewer businesses are taking on more workers and the length of the workweek is also being cut down.  Considering social distancing has continued to be on the rise and businesses now seem to face a lack of demand, it will not be surprising to see these readings tip negative next month. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

While US large cap stocks are right around 30% from their record highs a month ago, the carnage in small caps has been even more severe.  While the Russell 2000 never quite made a new high this year along with the broader market, it got pretty close.  Like the rest of the market, though, it has been crushed.  As of yesterday’s close, the Russell 2000 was 43.1% below its all-time high which ranks as the third-largest decline from a record high.  The only two periods where the Russell saw a larger decline were in October 2002 when the drawdown reached 46.1% and then in March 2009 when the selling finally stopped at 59.9% on March 9, 2009.  Now, if the Russell 2000 were to match either of those prior two periods in terms of magnitude, it would have to fall an additional 4.3% to match the decline of October 2002 or 28.9% to match the decline of March 2009. Start a two-week free trial to Bespoke Institutional for full access to our market and economic analysis.

As could be expected and as we have been warning this week (see here and here), shutdowns aimed to thwart the spread of the coronavirus have begun to impact weekly jobless claims.  Claims exploded higher by 70K to 281K this week. That is the largest weekly increase in the seasonally adjusted number since November of 2012 when they had risen 81K.  Going all the way back to the beginning of the data in 1967, there have only been 13 total times (including the two aforementioned instances) that jobless claims have risen by 70K or more in a single week.  The largest of these was a 172K spike in July of 1992.  While this week’s increase may have been large, just wait for next week’s explosion.

With the massive surge in claims this week, the indicator now sits at its highest level since the spike up to 299K in September 2017.  Other than that, the last time claims consistently came in around these levels was back in mid-2015. Given the fact that shutdowns across the country have ramped up over the past week, claims are likely to continue to experience large moves, and it is likely that we will see this number rise even further in the coming weeks.

The moving average has also risen but is not yet at as notable of levels as the seasonally adjusted number. Now at 231.5K, the moving average is only at its highest level since the final week of 2019 when it was 233.5K.  But the 16.5K increase versus last week is the largest spike in one week since October of 2013 when the moving average rose by 17K. Additionally, of all weeks since 2000, it is the 14th largest week over week increase.

The non-seasonally adjusted number rose by 50.5K this week to 250.9K.  For the current week of the year (12th week), that is the highest level since 2015 when it was 260.2K.Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

In the currency space, the US dollar has certainly not been immune from recent market volatility.  The dollar index peaked on February 20th, just one day after the S&P 500 had reached its all time highs.  That was the dollar’s highest level since April of 2017.  Over the following days, the dollar would go on to fall roughly 5% to its low on March 9th.  In the time since then, it has more than recovered those losses, rising over 6% and is once again back up to its highest levels since 2017.

This string of volatility for the greenback is rare.  As of today, the dollar is up 4.26% over the past ten days. But just back on the ninth (the recent low) it had been lower by 4.12% over the prior ten days.  The last time that there was both a 10-day change up and down of at least 4% in the span of just ten days was back in October of 2008. Going back through the index’s history since the early 1970s, there have been a total of 15 days (including that 2008 and current instances) in which such swings can be observed; shown by the red dots in the chart below. Prior to 2008, the only other times the dollar was as volatile by this measure was in the 1980s and late 1970s. So with regards to more recent history, it is even more unprecedented.

In terms of daily changes, the dollar has also been very volatile. Over the past ten days, the currency has averaged a daily change (positive or negative) of just over 1% which is rare going back through history. Again this is the most volatile the dollar has been since the financial crisis, though at that time, the daily swings were larger on average; reaching 1.35% at the high. Prior to 2008, the only other times the average daily change was over 1% was in the early 1990s, mid-1980s, and late 1970s. As with 2008, those past times were slightly more volatile than the current moment.  Start a two-week free trial to Bespoke Institutional to access all of our interactive tools and research.

Given the massive swings across assets, it should come as no surprise that volumes have been elevated.  For the S&P 500 ETF (SPY), over 3.25 billion shares have already exchanged hands in March through yesterday’s close.  That is the highest monthly volume for SPY since January of 2016, and keep in mind, we still have two weeks left in the month!

Considering that does not fully capture the Covid-19 saga which began to affect markets about a month ago now, we also looked at volumes over the last 20 days.  The volume of SPY traded in that time frame totals 4.7 billion shares.  As shown below, that is the highest volume since November of 2011.  One interesting thing to note, while volumes are certainly elevated, they still are not even close to levels in the years leading up, during, and shortly after the financial crisis.

While the number of shares trading hands has not eclipsed financial crisis highs, volumes in dollar terms have.  As of yesterday’s close, volumes reached a record of $1.4 trillion over the past 20 trading days.  The only other time that the dollar volume of SPY was over $1 trillion was briefly in 2008. Start a two-week free trial to Bespoke Institutional to access our full range of research and interactive tools.