Grim Data Wakes Up Investors
Let's start in chronological order - last night we saw strong earnings from Microsoft, Facebook and Tesla. This reinforced the move up in stocks, before the economic releases started coming in.
Overnight the Chinese Manufacturing PMIs for April came in below expectations. Then before the ECB meeting, we saw Eurozone preliminary GDP (QoQ) (Q1) coming in below expectations at -3.8%. During it's meeting the ECB continued it's pledge to support the Euro area economy. Lagarde warned that the euro-area economy could sink as much as 12%. The ECB President also highlighted that more fiscal support is needed from governments.
Then in the afternoon the weekly US Initial jobless claims came in at 3.8million bringing the six week total to above 30million.
The devastating effect of lockdowns imposed due to Covid 19 is starting to show in the data now. Thus today so far we are seeing a red candle, due to the reality of the fundamentals which contradict the optimism which investors were riding for weeks.
SP500 Cash Daily Chart
SP500 was trading close to 2900 earlier today. After the close we have Amazon and Apple first quarter earnings.