118 MONTHS AND COUNTING: Now that the economic recovery has continued into April, it is now into its 118th month, making this the second longest recovery in U.S. history, according to the National Bureau of Economic Research. The longest was 120 months from March 1991 to March 2001. In three months, this will be the longest recovery on record in the U.S. The obvious and oft-heard question is, “How long can it go?” As sports figures always say, records are meant to be broken, and sometimes by a lot. What is key is to look at the current data, and the trends indicated, and make conclusions based on that, not on how long the recovery has been going. If conditions support growth, the recovery will continue.
BANKS AND DISNEY EARNINGS LEAD THE WAY: It is that time of year when corporate earnings reports heavily influence the movement of the markets. If they surprise to the upside, stock prices tend to move up, and vice versa. This week, the S&P 500 had its third consecutive week of gains. Two major influencers were the surprisingly positive earnings reports of J.P. Morgan and Wells Fargo. Disney shares shot up over 10% on its announcement of a new streaming service.
THE WEEKLY INITIAL UNEMPLOYMENT NUMBER KEEPS GOING DOWN: 196,000 initial claims were made for unemployment benefits for the week that ended April 6. That is the lowest such number since the number one hit song on the pop charts was “Sugar, Sugar” by the Archies. (Now that song is going to be an ear worm in your head for the rest of the day). For those who don’t remember that song, or who were decades from being born, that was the first week of October 1969.
CHINA REBOUND BUOYS INVESTORS: This past week, data was released that showed Chinese exports rebounded in March. For the month, Chinese exports were up 14.2% from a year earlier, a sharp rise from a dismal February which put global investors on edge.