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Futures are off their earlier highs but still indicating a higher open.  The big datapoint of the morning was the April ADP Private Payrolls report which came in at 20.236 million- by far the highest ever reading (by a factor of more than 20).  While it’s little to no consolation, the print was actually slightly better than expected. Maybe the most impressive aspect of the release was that consensus estimates (20.550 million) were so close to the actual print.

Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, April PMI data, German Factory Orders, and the latest stats and trends on the COVID outbreak

We’re always paying close attention to market breadth for any signs of potential strength or weakness in the underlying market.  The chart below shows the S&P 500’s cumulative A/D line and price over the last year.  Comparing the two shows that breadth coming off the March lows has tracked price pretty closely.  Just about every higher high and higher low in the market has been confirmed by the S&P 500’s cumulative A/D line, so that doesn’t suggest anything untoward occurring underneath the surface.

While overall breadth is positive, there has been an interesting and modestly negative divergence in breadth on big market days versus big down days.  Since the 2/19 high for the S&P 500, there have been a total of 42 trading days where the S&P 500 was up or down 1% or more.  On the 20 days where the S&P 500 was up over 1%, the median breadth reading was +370.  On the 22 days where the S&P 500 was down over 1%, though, the median breadth reading was considerably more one-sided at negative 439.  In other words, on days where the market is down big, investors are taking more of a sell everything approach, whereas on days when the market is up big, they are being more discriminating in their buys.