The economic calendar is normal, with a focus on leading indicators and new home sales. The punditry will be less interested in data than in gauging the Fed’s reaction. 

Last Week Recap

My last edition of WTWA, I expected a focus on the continuing political turmoil, especially the market effects. That was a good guess, with the selection of Larry Kudlow as chief economic adviser especially important.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. I especially like the version updated each week by Jill Mislinski. She includes a lot of valuable information in a single visual. The full post has even more charts and analysis, so check it out.

The loss this week included trading range below 3%, lower than recent volatility. I summarize actual and implied volatility each week in the Indicator Snapshot. The actual volatility is going down faster than the VIX.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations. 

The news, both economic and policy effects, was market-friendly.

The Good

  • Inflation data. Not threatening at either the wholesale or retail level.
  • Michigan sentiment. A pop to 102 on the March preliminary reading.
  • NFIB small business optimism soars even higher, to 107.6.
  • The Larry Kudlow selection reassured markets.
  • The trade policy flexibility has limited market concern — at least so far.
  • Industrial production was solid, growing 1.1% after a decline last month and expectations of a small gain.
  • JOLTs showed continuing labor market strength, in both job openings and the quit rate.

    • The Bad

    Feel free to add items in the comments.

  • Housing data missed – new homes and building permits both disappointed.

    • Noteworthy

    Is the world getting better or worse for most people? I was surprised by the results from Our World in Data. The entire article covers background and key questions. Here is a chart that will stimulate your thinking.

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