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“It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date.” – Roger von Oech

The trend of the last few days has been one where the market traded with a positive bias in the morning only to give up those gains as the day went on.  Overnight, we saw a setup where futures were lower and have been gradually working their way back to even.  Could this be a signal of a reversal in the trend, or is this rally in the futures ahead of the opening bell just another pump fake to lure the bulls in?  While the failure of the market to hang on to gains recently has been disheartening, as we noted yesterday, it isn’t a particularly uncommon pattern.

In economic news, initial and continuing jobless claims both came in better than expected.  Initial claims dropped below 800K for the first time since March, and at 787K were nearly 100K below consensus forecasts of 870K.  Continuing claims were just as positive.  At 8.373 million, continuing claims were more than a million below consensus forecasts.  Even with the positive numbers, though, there has been zero in the way of a positive reaction from the futures market.

Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, key earnings data from the US and Europe, trends related to the COVID-19 outbreak, and much more.

While the S&P 500 is showing signs of what looks like a double-top, conditions in the corporate bond market haven’t shown any signs of stress.  The chart below compares the S&P 500 to spreads on corporate bonds (using the BofA Corporate Master Index as a proxy) shown on an inverted basis.  Through yesterday’s close, spreads on corporate bonds actually traded to their narrowest level since early March.  Just as the corporate bond market hasn’t confirmed the recent upward moves in equities, they haven’t confirmed the weakness either. All this points to a market in consolidation mode and given an uncertain political and health outlook, can you blame the market for being indecisive?