Economic growth in the US eased in April to a four-month low, according to this morning’s update of the three-month average of the Chicago Fed National Activity Index (CFNAI-MA3). The reading for last month dipped to -0.22, the lowest since last December’s -0.28 reading.
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The bear-market bias that’s been lurking for the US stock market since last autumn remains intact, according to several econometric applications. Although equities overall continue to trade near all-time highs, the mild downward slope in pricing in recent months suggests that the market’s capacity to rally is wearing thin. What would kill the bear-market threat? A convincing run of strong economic reports. Granted, the macro trend isn’t terrible, as outlined in yesterday’s US economic profile. But the numbers aren’t particularly encouraging either. The net result: the market’s in a state of limbo, waiting for a convincing signal, for good or ill. But as long as the incoming macro figures are mixed, as they have been this year, the bear-market bias for equities will roll on. After a powerful and long-running bull market for 2009-2015?, the crowd needs a higher level of convincing to keep the party going at this late date.
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● Fed minutes signal rate hike firmly on the table for June | Reuters
● Business Inflation Expectations Rise Slightly to 1.9% | Atlanta Fed
● Despite lowest rates in a year, mortgage appls down 1.6% last week | CNBC
● Study Projects TPP Will Provide Modest Gains for US Economy | WSJ
● US ISM Survey Chiefs: Hoping For Better Months Rest of Year | MNI