After giving up much of yesterday’s gains toward the end of the trading session (Cohen/Trump headlines), stocks bounced higher overnight in response to Chinese President Xi’s attempt to diffuse the current tensions with the United States over trade practices. Xi pledged a “new phase of opening up” the Chinese economy and to cut tariffs on imports, and he also called for an end to “the Cold War mentality and zero-sum-game thinking” that are “outdated.” While Xi was effectively repeating previous pledges/measures, it was very timely from a market perspective given escalated tensions with the U.S. in recent weeks. S&P 500 futures immediately popped 30 points higher, and Treasury prices are drifting lower this morning.  Xi’s speech also provided at least a temporary distraction from yesterday’s announcement that the FBI had raided the office of President Trump’s personal attorney Michael Cohen. This presents another potential headwind for risk markets in the coming days/weeks as it relates to political uncertainty.  On the data front, the NFIB Small Business Optimism Index slipped three points to 104.7 in March. The primary catalysts for the March decline were a decline in expectations for better business conditions and a decline in expected sales. That said, the index continues to hold near the top-end of the 45-year range.

Jason Haley
Managing Director, Investment Management Group

DateEventSurv(M)ActualPriorRevised
04/10NFIB Small Business Optimism107104.7107.6
04/10PPI Final Demand MoM0.10%0.30%0.20%
04/10PPI Ex Food and Energy MoM0.20%0.30%0.20%
04/10PPI Ex Food, Energy, Trade MoM0.20%0.40%0.40%
04/10PPI Final Demand YoY2.90%3.00%2.80%
04/10PPI Ex Food and Energy YoY2.60%2.70%2.50%
04/10PPI Ex Food, Energy, Trade YoY2.90%2.70%
04/10Wholesale Inventories MoM0.80%1.10%
04/10Wholesale Trade Sales MoM0.10%-1.10%
04/11MBA Mortgage Applications-3.30%
04/11CPI MoM0.00%0.20%
04/11CPI Ex Food and Energy MoM0.20%0.20%
04/11CPI YoY2.40%2.20%
04/11CPI Ex Food and Energy YoY2.10%1.80%
04/11CPI Index NSA249.576248.991
04/11CPI Core Index SA256.2255.751
04/11Real Avg Weekly Earnings YoY0.60%
04/11Real Avg Hourly Earning YoY0.40%0.30%
04/11Monthly Budget Statement-$186.0b-$215.2b
04/11FOMC Meeting Minutes
04/12Import Price Index MoM0.10%0.40%
04/12Initial Jobless Claims230k242k
04/12Import Price Index ex Petroleum MoM0.20%0.50%
04/12Import Price Index YoY3.80%3.50%
04/12Continuing Claims1843k1808k
04/12Export Price Index MoM0.20%0.20%
04/12Export Price Index YoY3.30%
04/12Bloomberg April United States Economic Survey
04/12Bloomberg Consumer Comfort57.2
04/13JOLTS Job Openings60656312
04/13U. of Mich. Sentiment100.5101.4
04/13U. of Mich. Current Conditions121.2
04/13U. of Mich. Expectations88.8
04/13U. of Mich. 1 Yr Inflation2.80%
04/13U. of Mich. 5-10 Yr Inflation2.50%