“I’ma Need Some Whiskey Glasses…Cause I don’t wanna see the truth…” That may be because the truth is being completely warped by the quite visible hand of the Powell print. And the Trump Administration (a cool $1 trillion anyone?!). And economic data, which seems to be about as misleading as they come. How is it possible that retail sales are up so much M/M?! Recall they came from a very low base — down 16% in April meant a snapback was not expected and unsurprising. Also, people are possibly now spending their government signed checks, which could be a one-time event. However, skepticism is running rampant in regards to what is formerly known as “the market,” which is leaving fund managers in the latest BofA survey asking how far is too far. 78% of the managers surveyed see the stock market as “overvalued.”

Defying Gravity…The markets are “through accepting limits cause someone says they’re so…(h/t Idina Menzel).” Despite second wave corona concerns peppering headlines over the weekend, US markets moseyed their way back into positive/neutral territory over the course of this quiet (volume-wise) Monday. The move was already heading from bottom left to top right before Citigroup’s U.S. economic surprise index was revealed to have surged to the highest level since 2003 inception, and before Reuters reported the U.S. will allow American companies to work with Huawei to develop standards, despite its blacklisting. Not to mention the 2pm announcement that The Fed’s going to buy a broad based portfolio of US corporate debt. That’ll do. The leaderboard includes tech and consumer discretionary, as well as oil, which reversed early losses. This week there are an array of potential wrenches to be thrown into the mix, ranging from retail sales to quad witching, but the way things have been going it seems fighting the tape (or The Fed) is in not in anyone’s best interest.

Do NOT Blink….You might miss something good like Nasdaq 10,000! Which is interesting, because first thing this morning the market was collapsing under its own weight as Treasuries were bought and hedges started to look attractive again. It seemed as though the last 2 weeks of covering/squeezing had come to an abrupt end. The proof was in the momentum reversal and curve finally flattening, as some of the best performing cyclicals from the past 2 weeks were put back in their place (lower). See: energy, financials and airlines. However, you can’t keep a “good” market down and the invisible hand came back in to buy mid-morning, leaving the markets in an optically meh day of losses, down just 70- bps from almost double that earlier in the day. Apple also helped, of course, rallying over 3% on news that it will shift its own main processors in Mac computers. The pain is real.

Embracing Hope – After yesterday’s buying bonanza, markets were sure to about face and forge a sharp reversal today. However, the potential for a vaccine and Powell speaking to the use of any and all CB weaponry, has had lasting enough effects to keep the rally (for the S&P and Nasdaq) going. today The good news is value has started to outperform (though MSFT and Apple are doing a bulk of the work for everybody), and yesterday S&P equal weighted smalls also outperformed. Further, the positioning sentiment indicator is poised for recovery (see below). There are obviously a million notes of caution going into the end of 2020– unemployment, the US presidential election and possibly tighter lending standards. No one can accurately predict the war between science/stimulus vs. nature/fear, but we do know volatility will be one winner.

The More We Know…The good news? The number of new confirmed COVID-19 cases has levelled off on a global basis. The bad news? That doesn’t tell the whole story. Some countries – particularly developing economies – are only in the beginning stages of this pandemic, which is huge cause for concern because many have larger populations and fewer resources. The global curve is still a ways from being flat.

Curious Case of Mixed Signals…We are stuck in the land of in-between currently, though given the moves up today, sentiment isn’t faring too badly.

A Wing and a Prayer….US markets thrive on hope and also CB stimulus. But, today has been mostly the former (until the FOMC at 2:30p, of course). Despite US GDP seeing its worse quarter since 2008 (first economic contraction since the first quarter of 2014), pending home sales being down 21% in March and Boeing announcing it would cut 16,000 jobs, markets have forged ahead on the hope that Gilead’s remdesivir really would be the answer COVID-19 patients and doctors have been looking for. The experimental drug met its primary endpoint and the biotech company’s shares soared 7%. Two caveats to note:  The study did not compare the use of remdesivir to a placebo, making it difficult to reach conclusions based on the data. Also, a separate study published in The Lancet today (and leaked by WHO last  week) showed that the drug did not have significant health benefits for critically ill COVID patients.

Oil’s Well That Ends. There’s a 0% chance we have seen the end of the oil storage saga that has plagued the globe of late. Crude +21% today means nothing when the price is still below $15 and the buildup continues to hit new records (and USO continues to plummet) . If this continues, the loss of revenue is likely to create widespread financial and political pain for countries reliant on petrol production.

Will April Fool Us…? Today, Q2 begins on a sour note thus far with basically more of the same. Even though everything is down, it is with the same leadership as we have seen. Cyclicals keep getting hammered and tech remains the outperformer (because of its bond-esque qualities – growth in a world of no yield).  That said, equities are still not far off the week’s highs. Thus, it might be time to ask the question – have we seen the bottom yet?!

FREAKY FRIDAY, PLEASE. Stocks opened on the back foot and have remained that way today, but there’s still a virtual eternity between now and the close— thus, anything could happen. There is at least one weekly certainty surrounding these volatile times though— Friday’s get sold without fail. From February 28th onward, EVERY Friday has seen the same pattern —risk-off into the weekends. In the same way that we need the $ to keep easing, we need Friday’s to become more bullet-proof. Either way, today’s close, is KEY, but looks currently to not be playing ball. S&P +17.55%, SXXP +14.6% the last three days —these strong moves mean the bar is set higher– but the sentiment remains no less important.