Healthcare continues to exhibit weakness. While the S&P 500 Index remains less than 2% from all-time highs, the second largest sector remains under pressure this week, and is currently the only sector with negative returns YTD, trailing the broader index by 16.8%. With the tumble this week, healthcare appears to be oversold on a short-term basis as indicated by the 14-period Relative Strength Index, though we continue to prefer cyclical sectors such as Technology, Financials, and Industrials for equity allocations.
U.S, China hoping to close a deal. Reports are indicating that two new rounds of face-to-face meetings are tentatively scheduled over the next three weeks, first in Beijing and then Washington, as top negotiators look to finalize a deal and hold a signing ceremony in late May or early June. The news is encouraging, though details are scarce at this point.
U.S. consumer alive and well (and spending). Data out this morning showed initial jobless claims touched a new 49-year low, while retail sales in March were up 1.6% month over month, topping consensus estimates (+1.0%) as 12 of 13 major categories increased. The impressive rebound in consumer data, along with solid wage growth, historically low unemployment, and an accommodative Federal Reserve, suggest the current cycle has more room to run.
Green shoots on Main Street. We’ve talked a lot about green shoots in the U.S. economy recently. There has been a slew of recent data pointing to a rebound in growth, and yesterday, we gathered more clues on a potential recovery from the Federal Reserve’s Beige Book. On the LPL Research blog today, we’ll highlight the rebound in Main Street sentiment, which we measure using LPL Research’s Beige Book Barometer.
- Retail Sales (MoM Mar)
- Initial Jobless Claims (Apr 13)
- Markit US Manufacturing PMI (Preliminary Apr)
- Markit US Services PMI (Preliminary Apr)
- Markit US Composite PMI (Preliminary Apr)
- Leading Index (MoM Mar)
- Germany PPI Report (Mar)
- Japan CPI Report (Mar)
- Housing Starts (MoM Mar)
- Building Permits (MoM Mar)
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Index data obtained via FactSet
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