WASHINGTON (MaceNews) – Significant economic data reports other than new and existing home sales are completely absent in the week ahead but plenty is happening in the economy now that it’s in the midst of one of its biggest booms ever. Which makes a lot of Nervous Nellies, well, nervous.
In a world of accelerating acronyms and strange newcomers to the headlines – SPACS, NFTs to say nothing of skyrocketing cryptos – is it really time to surrender to uncertainty? Or is it the worst possible time to hoard cash and ignore the cascading stimulus beneficence, spreading vaccinations and heightened optimism.
It would seem so. On that one hand of a multi-handed trading economist – having only two hands is so 2020 – we’ve had a week in which the VIX fear index was so much less fearsome, settling below 17. The U.S. 10-year yield which was spooking the markets just prior to April Fools’ Day – 1.745% March 31- drifted below 1.6%.
The words of the week were “pent-up demand” and with Coinbase in the background debuting at more than $80 billion valuation and stocks hitting record close after record close, what’s not to like? And Coinbase wasn’t even benefiting from one of Bitcoin’s spawn, Dogecoin, which saw its own valuation exceed $40 billion this week, a more than 8000% gain this year so far. Bitcoin is only up around 130%.
For those moss-covered conservative investors who were only brave enough to bet the house on Tesla, where’s that $900 a share valuation now?
Hey, snap out of it. Don’t worry that Ethereum is up 230% this year, that you missed out on Recursion Pharmaceutical’s 64% stock gain Friday alone. Because we’re still in a recession. The recovery is still ahead. There’s plenty of time to pick out those horses to ride through the summer months.
Isn’t the first quarter GDP going to be a blowout? The Atlanta Fed’s GDPNow tracker sees an 8.3% leap. Isn’t the TSA clocking an average of more than 1.3 million airline passengers a day this week? How can we still be in a recession?
Let’s listen to a fresh new voice on the economic scene explain it. Actually Chris Waller, the new entrant to the Federal Reserve Board, isn’t all that fresh. He was research director at the St. Louis Fed since 2009. Anyway, he gets to the heard of it in his first interview as governor Friday on CNBC.
“The thing we have to keep in mind,” he said, is we have to keep in mind that from the level of where we were, we’re not there yet.” “Level,” he was saying, is the operative word, not growth.
“So we still got room to catch up to where we were,” he continued. “We’re making up for lost ground. So just because the growth rates are really good and everything’s looking like we’re heading off in the right direction we’re still trying to make up a lot of ground.”
There are still “in the neighborhood of seven or eight millions jobs from where we were just a little over a year ago. So we’ve got to make that up first.”
Yes, the economy, he said, “is ready to rip” but it’s still a restoration rip, rehiring and replacing what was there before. When the overall economy catches up to full employment and then advances to where it would have been without the pandemic is a time well ahead of us. Many quarters.
Meanwhile the Centers for Disease Control places charts in front of us showing upward curves for hospitalizations and deaths. Vaccinations are being administered by the millions a day, but there are more than 300 million Americans. Can vaccines outrun the B117 variant which is now 43% of all infections or will it trigger a giant national letdown if deaths return to levels intolerable for policymakers?
How fragile is the new digital economy? How close to ignition are all those hotpots around the world, from Ukraine to Taiwan? Is inflation so easily disregarded, or will transitory surges become self-reinforcing? Let’s leave rogue asteroids the San Andreus fault or the 1,344 square mile Yellowstone caldera out of the probability matrix for the time being. Just the possibility of any post-Chauvin verdict era of civil unrest is enough to contemplate.
As we all know, the primary characteristic of the successful trader is the facility to switch outlooks on a microsecond notice. The sun is now going to shine every 48 hours, not 24? No problem. For the successful civil participant, somewhat slower to adjust, it’s been a year of great change so far. With much more to come.
Bring on Tuesday’s Philly Fed non-manufacturing report and Thursday’s jobless claims report. All the upcoming week’s data points listed below:
Upcoming Economic Data and Federal Reserve Events
Monday, April 19 – Closing arguments in Derek Chauvin trial
Tuesday, April 20 – 8:30a Philly Fed non-manufacturing survey
Tuesday, April 20 – 855a Redbook same-store retail activity
Wednesday, April 21 – 7a US MBA wkly mortgage applications
Wednesday, April 21 – 10:30a US EIA oil stocks
Wednesday, April 21 – 2p – US Tsy’s Yellen interviewed by IIF
Thursday, April 22 – 8:30a US wkly jobless claims
Thursday, April 22 – 8:30a (ECB news conference)
Thursday, April 22 – 8:30a ChiFed national business activity index
Thursday, April 22 – 10a – US NAR Existing home sales
Thursday, April 22 – 10a US Conf Brd leading economic indicators
Thursday, April 22 – 11a KC Fed Composite activity index
Friday, April 23 – 9:45a Markit US manufacturing/services PMI
Friday, April 23 – 10a – US new home sales
Friday, April 23 – 1p Baker Hughes oil rig count
Separately, from Extract Analytics, the outlook for the upcoming week’s SPX:
Contact this reporter: denny@macenews.com.
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