A very weak jobs number from the Labor Department for the month of March just rolled in.  Nonfarm payrolls fell 701K in March compared to 273K added jobs in February.  That was also a much weaker number than the consensus forecast which was only predicting a drop of 100K.  In fact, of all reports since 1998 in our Economic Indicator Database, this was the largest miss. This was also the first time since September 2010 that monthly payrolls have been negative.

Taking a longer-term look, this was also the eighth largest decline on record in the data going back to early 1939. The last time that a larger decline was observed was in March of 2009 (-800K).  One important factor to note about this month’s report is the collection period. Since the reference week for the monthly report is in the first half of the month, the massive job losses recorded in the second half of March were not even fully picked up in this report. In other words, next month’s report is going to be a LOT worse.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Over the past year, the Technology sector has been the most notable sector in terms of outperformance relative to the S&P 500. As shown in the charts from our Sector Snapshot below, the relative strength chart for Technology has been in a steady uptrend for the past twelve months without much interruption even while the decade long bull market was coming to an end. In fact, last week it was the first sector to exit oversold territory after every sector was oversold for 13 days. The other sectors have not been as lucky. During the recent sell off, the relative performance of most sectors, especially cyclicals like Energy, Financials, and Industrials, fell sharply (indicating even worse declines than the S&P 500).  Consumer Staples and Health Care, on the other hand, have seen much stronger performance than the rest of the market.  Start a two-week free trial to Bespoke Institutional to access Sector Snapshot and much more.

Tuesday’s Consumer Confidence report managed to exceed expectations, but as we noted at the time, the survey for the March reports cuts off on the 18th, so as economic conditions turned south, sentiment levels also likely declined.  One area of the report where sentiment already has seen a notable decline is in consumer sentiment towards stock prices.  As shown in the top chart below, the percentage of consumers expecting stock prices to decline nearly doubled from 21.7% up to 39.2% while the percentage of consumers looking for higher prices dropped from 43.1% down to 32.3%. In the case of negative sentiment, the percentage of bearish consumers hasn’t been this high since late 2012.

Given the major shift in sentiment, the spread between bullish and bearish consumers has seen a major reversal falling from firmly positive (21.4) to firmly negative (-6.9).  By this measure, the spread between bullish and bearish investors hasn’t been this negative since February 2016.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Like the S&P 500 and many Americans practicing social distancing, investor sentiment hasn’t moved too far over the past week.  Bullish sentiment rose from 32.9% to 34.24%. That is one of the smaller moves in recent weeks which leaves the indicator just about in line with the average for bullish sentiment (34.44%) since the bear market began on 2/19.

It may not have been by much, but bearish sentiment dropped below 49.7% for the first time since the first week of March. While lower, bearish sentiment remains very elevated compared to the past decade. The over 10% rally for the S&P 500 since last Monday’s low has not been enough to persuade a more optimistic outlook for the bulk of investors.

Not all the losses in bearish sentiment went to bulls. 16.03% of investors reported neutral sentiment this week which is a full percentage point higher than last week’s reading.  While that is an improvement, this reading remains at the extreme end of the past several years’ range.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Last week, a record number of Americans filed for unemployment as initial jobless claims surged to 3.283 million. That number was revised higher to 3.307 million this week setting an even higher bar for a new record. Despite that, this week’s print doubled last week’s record number as jobless claims came in at 6.648 million. Put another way, that is roughly 2% of the entire US population filing for unemployment this week alone! Not only did this week’s release double last week’s record print, but it was also above the most aggressive forecasts of 6.5 million. With claims having risen this much, any historical precedent has been utterly blown out of the water. The past few weeks are multiples larger than even past recessions’ peaks. Additionally, the size of the week over week changes have also been much larger than anything previously observed in the history of the data.

One silver lining of the report is due to seasonal factoring, the adjusted number is about 824K higher than the non-seasonally adjusted number which came in at 5.824 million this week.  In other words, the actual number reported before seasonal adjustment is still very bad, but not quite as bad as the seasonally adjusted number lets on.  As with the adjusted number, this did double what was already a record print last week on the largest week over week change ever.

Normally, the four-week moving average would help to smooth out any week to week fluctuations of this data. But seeing as the current situation is far from normal, there is not much smoothing happening. Even the moving average has ripped higher by more than any other period in history. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.