LIVE MARKETS-Hard data resilience points to strong stock returns
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HARD DATA RESILIENCE POINTS TO STRONG STOCK RETURNS
The gap between bearish soft U.S. data releases and bullish hard data is the largest on record, and if the economy holds up that likely signals strong stocks gains to come, according to Bank of America.
“In the past 70 years, when the two longest-running soft data measures - ISM manufacturing PMI & the Conference Board consumer survey - weakened sharply but no recession followed, it was typically a great time to invest,” BofA analysts including Jared Woodard said in a report on Wednesday.
Indeed, in this scenario U.S. stocks returned 17% on average in the 12 months following a decline in sentiment outside of a recession, compared to 11% average all time returns since 1951.
U.S. high yield and investment grade corporate debt also outperformed U.S. Treasuries by 3% on average when the soft data stalled, while commodities outperformed U.S. government debt by 1%.
And stocks can rally even if the Federal Reserve continues to keep interest rates on hold, the analysts said, saying that in poor sentiment periods when the Fed hiked or maintained rates, U.S. equities still averaged 14% returns over the coming 12 months.
(Karen Brettell)
WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
STRUGGLING TO FIND A REASON FOR RATE CUTS CLICK HERE
DOLLAR HELD BACK ON SUSPICIONS TRUMP WANTS WEAK U.S. CURRENCY CLICK HERE
BOFA CLIENTS CONTINUE TO SNAP UP STOCKS CLICK HERE
WOULD-BE HOMEBUYERS WHISTLE PAST MORTGAGE RATE UPTICK CLICK HERE
MAIN US INDEXES EDGE UP; INDUSTRIALS, FINANCIALS NOT FAR FROM FRESH RECORDS CLICK HERE
S&P 500 INDEX: HAVE WE SEEN LIFTOFF? CLICK HERE
RETAIL INVESTORS GOT IT RIGHT, WHEN WILL INSTITUTIONS COME BACK? CLICK HERE
LAGGING ETHER SOARS AHEAD OF BITCOIN IN MAY CLICK HERE
IS THE BOE BACK IN THE MONEY? CLICK HERE
TIME TO STEP BACK INTO LUXURY? CLICK HERE
EARNINGS DRIVE BIG MOVES CLICK HERE
BEFORE THE BELL: EUROPE STEADY, CHINA TECH EYED CLICK HERE
MARKETS NEAR EVEN KEEL AMID TRADE DEAL HOPE CLICK HERE
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