Charts to Chew On: An Alright April.
Contextualizing monthly consumer sentiment and market momentum. Data as of April 30, 2023.
For those who are newer here, I publish monthly readouts on the state of the markets and the corresponding implications for the US consumer. Read on for more!
April marked a month of digestion post March’s Spring Break hangover. The NASDAQ closed the month close to flat, while the VIX closed the month hovering around 16, marking an 18-month low for the volatility measure. Despite the typical ups and downs associated with Q1 earnings, April’s moves were muted on a relative basis as economic data effectively threaded the expectations needle while earnings came in better than bears feared.
Notably, almost 80% of corporates who have reported Q1 earnings released better-than-expected numbers, a higher number of upside surprises than normal and an indication that the consumer just might be hanging in there – at least for now. Interestingly, consumer-focused stocks outperformed enterprise with consumer executives across spending categories highlighting strong and resilient consumer demand, while enterprise teams pointed to slowing sales cycles and revenue growth. While tail risks for the consumer remain with the ongoing credit crunch and looming real estate reckoning, the market today has seemingly elected to keep calm and carry on.
This week’s FOMC meeting could mark the end of a short lived era with many expecting the Fed to deliver their final 25 bps rate hike and signal a coming pause. As both growth and inflation slow at a measured pace, might today’s set up actually support a soft landing? While the coming days will likely tell us far more regarding what we can expect from here, please see below for the latest economic readouts currently influencing my own mental model.
Note: Data reflective of April 30, 2023. This does not constitute investment advice.
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