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Chief Economist Scott Brown discusses the latest market data.

Jobless claims fell to 4.43 million in the week ending April 17, down in recent weeks but still extremely elevated. Prior to seasonal adjustment, 24.4 million people have filed claims in the past five weeks – that’s nearly 15% of the labor force (or one in seven workers). The UM Consumer Sentiment Index was little changed from the mid-April assessment, but remained sharply lower than in March. Looking ahead, sentiment is expected to be driven by the pacing of reopening across states and whether that goes too fast or too slow.

Congress agreed to a Phase 4 stimulus, which provides more healthcare funding, reloads the Payroll Protection Program (lending to small business), and provides further support for state and local government. That brings the total aid to about $3 trillion, on top of the $1 trillion deficit before COVID-19 (totaling about 18% of GDP).

Next week, don’t expect much more from the Fed (the Fed has already lowered short-term interest rates as much as possible, offered unlimited asset purchases to promote liquidity, restarted old emergency lending facilities and created a few new ones). Chair Powell is expected to exhibit a calm, confident demeanor is his post-FOMC press conference. COVID-19 has affected data collection for most GDP components, adding to the usual noise and uncertainty in the advance estimate. March weakness appears to be enough to pull 1Q20 GDP growth into negative territory. Jobless claims will remain the key figure to watch and we should see the pace slowing (but still extremely high). March personal income and spending numbers should be weak. The ISM Manufacturing Index should fall further in April.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Commodities

Bond Rates

Treasury Yield Curve – 04/24/2020

S&P Sector Performance (YTD) – 04/24/2020

 

As of close of business 04/23/2020

Economic Calendar

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business April 23, 2020.