Real-time data continues to provide valuable insight into the current state of the US economy even as traditional economic data is too slow to pick up changes that are occurring.

Today we revisit some of the real-time data points that we are monitoring and find that while there is clearly a long way to go, there are green shoots indicating the US economy is on the road to recovery. Following the COVID-19 lockdowns and business closures in March and April, all 50 states have now reopened to some extent and we can already see the impact of the reopening in the real-time data.

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Index Performance – Week ending 6/12/2020

S&P 500 Index:  -4.8%

Dow Jones Industrial Average:  -5.6%

Nasdaq Composite:  -2.3%

Equities

US equities sold off this week, as the S&P 500 Index posted its largest weekly loss since late March. The Nasdaq outperformed amid the sell-off, bearing similarities to action seen in February and March.  Last week’s winners were this week’s losers as energy, financials and industrials all retreated more than 6%. Technology was the bright spot, down only a fraction this week. Small and mid-caps underperformed with the Russell 2000

“Stocks take an escalator up, but an elevator down.” — Old investment axiom

The saying above sure happened yesterday. In the end, the S&P 500 Index fell 5.9% for the worst day since March 16 and the first three-day losing streak in more than three months. What does it mean? We’ve been on record that we expect some type of well-deserved pullback or at least consolidation after the 45% bounce off of the March 23 lows and the best 50-day rally ever. Then add in the fact that June has been the worst month of the year for stocks since 2000 and some type of weakness is perfectly logical here and now.

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The Federal Reserve (Fed) completed its third scheduled policy meeting of the year Wednesday, June 10, and continued to signal strong support for the economy, committing to keeping rates near zero until it is confident of a recovery and maintaining bond purchases (“quantitative easing”), at least at the current level.

“Despite some early signs of economic improvement, the Fed reinforced that it will remain supportive until uncertainty lifts and the economy is in a stable, sustained recovery, and that may mean no rate hikes until 2023,” said LPL Financial Senior Market Strategist Ryan Detrick.