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“Asking economists for investment advice is like asking a physicist to fix a broken toilet. Not their field, though sort of related.” – Milton Friedman

Morning stock market summary

Below is some introductory commentary of today’s Morning Lineup.  Start a two-week trial to Bespoke Premium to get full access.  

As if the calendar of economic data hasn’t been significant enough already, it’s another busy day for data today with Import and Export Prices (both weaker than expected), Jobless Claims (higher than expected), and the Philly Fed (less negative than expected) at 8:30.  Then at 9:15, we’ll get releases of Industrial Production and Capacity Utilization, followed by Homebuilder Sentiment at 10 and the KC Fed Manufacturing report at 11.

In addition to the economic slate, earnings season comes to an unofficial end today as Walmart (WMT) reported earlier this morning.  While the company reported better-than-expected earnings and sales, the stock is trading down over 6% after lowering full-year guidance and some cautious commentary from management on the state of the consumer (see page four of today’s report).

Since last Thursday’s close when the last update to the weekly sentiment survey from the American Association of Individual Investors (AAII) was released, the S&P 500 has rallied over 3%.  Given the surge in stocks, you would expect to see a sharp spike in bullish sentiment, but as this week’s latest update shows that hasn’t necessarily been the case.

In the last week, AAII’s survey of bullish sentiment showed an increase from 42.6% up to 43.8%.  Granted, the prior week saw an increase of over 18 percentage points, but with the market continuing its run, we would have expected a bullish reading of closer to 50% this week.

Not only was the increase in bullish sentiment modest, but bearish sentiment increased slightly rising from 27.2% to 28.1%.  Again, the prior week showed a sharp decline in bearish sentiment, but with the S&P 500 up so much during the week, any increase in bearish sentiment is a bit surprising.

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