April starts 2Q 2016 off on a weak note offering more reasons to be cautious
It took a late Friday afternoon market rally for the S&P 500 to remain in positive territory for 2016. It’s a modest gain year to date, just 1.4 percent, but it could, and probably should be much worse considering last week’s weaker than expected April Employment Report, and the market finally coming to the realization that the global economy is on softer footing than previously thought just a few months ago.
Of course, if you’ve been reading this Monday Morning Kickoff each week, you’ve come to grips with these realities long ago.
In this week’s Monday Morning Kickoff:
- The global economy remained in low gear in April and company commentary last week was more confirming than not of that reality.
- Earnings expectations for the second half of 2016 remain aggressive and will likely repeat the downward revision we saw with 1Q 2016 GDP expectations
- We see no reason for the Fed to boost interest rates until late 2016 at the soonest.
- April Data to watch this week includes the Retail Sales Report and the Producer Price Index — we expect both will point to a sluggish economy.
- Sector investing is dead, and that’s why we have our thematic lens on corporate earnings this week.
