The major averages closed Easter week with solid gains. As the markets returned to their winning ways for the first time in 6-weeks. Since last Fridays close the S&P 500 gained 214 points or 3.36%. The NASDAQ jumped 931 points or 4.44%, while the DOW surged 1,338 points or 2.96%.
Q-1 Earnings
With the calendar now closed on the first quarter. Already solid earnings expectations north of 12% got revised up to 13.2% for the S&P 500 index. Led by the IT, Energy and Financial sectors. Revenues were also revised higher from 8.2% to 9.7%. Very solid numbers that suggest Wall Street is expecting a quick end to the war with Iran.
A Summer Job?
A reversal of the reckless immigration policies of the open borders era is producing some unusual data points. 1st up the number of new jobs created is well below demographic trend or about 150,000 new jobs each month. Just to keep up with population trends. Separations from service or employment have fallen to an 11 year low. Labor market churn has plunged along with the mobility data or the number of people moving. Yet the unemployment rate remains relatively unchanged, when historically it should be steadily increasing. Funny things happen on the way to the theatre. When you close the borders and remove large numbers of illegal aliens who were distorting the economy and the labor market.
Uncle Sam’s Dollar
Continues to fall out of favor with our global trading partners. dropping to a 31-year low of 56.8% of foreign central bank reserve holdings. Not because our trading partners are shunning US assets. In fact the Treasury International Capital Flows report shows robust foreign direct investment and interest in Dollar denominated assets. But because foreign central banks have been chasing diversification. One of the reasons precious metals like gold have done so well recently.
I can remember a time, not too long ago. When the doom and gloom crowd was running around saying the Euro, Renminbi etc. was going to surpass the Dollar’s spot as the world’s reserve currency. Europe has nearly destroyed itself with poorly considered domestic policies in an attempt to please its globalist masters. The Chinese are entering a period of demographic issues compliments of its 1 child policy and reckless credit use destined to hobble its aspirations. Leaving the US Dollar as the last man standing again.
Enjoy your Easter weekend, I’ll be back next Friday.
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