By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- Earnings will be front and center this week with roughly one third of S&P 500 companies scheduled to report. Earnings were expected to be soft last quarter and within that context, the earnings season is off to a relatively solid start. Some of the big names reporting this week include Coke, Microsoft. Google and Amazon.
- The Fed’s favored measure of inflation, personal consumption expenditures (PCE), will be released on Friday. PCE and core PCE (excluding food and energy) are expected to decline to 4.1% and 4.5%, respectively. Overall PCE has been above 5% for 17 consecutive months.
- Other data on the calendar includes consumer confidence, consumer sentiment, new and pending home sales, and durable goods orders. Recent data indicates that housing is attempting to stabilize as is consumer sentiment. One thing to watch will be the inflation expectations portion of the University of Michigan consumer sentiment release. One-year inflation expectations had a large jump (to 4.6%) last month.
Three Things to Know
- The 3-month T-bill yields 178 basis points more than the 1-month T-bill, the highest spread between the two on record. (Source: Bloomberg)
- Large speculators/hedge funds are back to seeing largest net short position in S&P 500 futures (indicating bearish positioning) since 2011. (Source: Liz Ann Sonders)
- After seven straight monthly declines following the peak last July, used-car prices are moving higher again, up 3.8% in March-April. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.