Same Story - Positive Beats

Macro Perspectives: Fri 16 Apr 2021

We heard from Citibank and Bank of America yesterday, same story with positive beats.

As we discussed, the banks have a war chest of loan loss reserves that they will continue to move to the bottom line at their discretion. That means they have a large inventory of positive earnings surprises they will present to us for several quarters to come. Stocks like positive earnings surprises, that said, the initial moves in a few of these stocks have been down, as bank CEOs are doing their best in the earnings calls to avoid an overexuberance in the outlook. It just creates a little cheaper level to buy from.

Remember, we've talked about what the confluence of huge government spending, ultra-easy Fed policy, and vaccinations will do to both earnings and economic data this year, as we compare it to the lockdown data of last year - the numbers are going to be "mind-blowingly big."

With that, we had the retail sales report out yesterday from the month of March. The April to March growth was 10%, the March 2021 to March 2020 growth was 28%. Wait until we get to the year-over-year economic data for the quarter.

The data will continue to be a fire under stocks, and despite the Fed's best efforts recently to quell inflation fears, the inflation hedges look to be on the move again, after a pause.

Gold is bouncing...Meanwhile the dollar has been steadily making lower lows since the new quarter/month started.

This market observation, combined with the big economic and earnings data growth ahead of us, is a formula for another leg higher in the "global reset of asset prices."