A week packed with U.S. economic data is likely to provide investors with more evidence of the extent to which the coronavirus pandemic has hit growth, sharpening the debate on whether a rebound in stocks has been justified amid an unprecedented slowdown.
FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri
“The market has shown an ability to look through the economic data. I think it will continue to do that for the April data,” said Doug Cohen, managing director for portfolio management at Athena Capital Advisors. Economists polled by Reuters expect retail sales to tumble 10% in April, surpassing the record drop of 8.4% in March. Industrial production, which slipped 5.4% in March, is forecast to fall 11.6%.
“Markets are suffering from cognitive dissonance,” said Rob Almeida, global investment strategist for MFS Investment Management, which manages about $470 billion in assets. “Even if you reopen economies... you are not going to have economic normalization in the second or third quarter.”to erase all its year-to-date losses on Thursday. Rebounds in beaten-down sectors like energy have helped push the S&P higher in recent days.
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