Will Congress enact further fiscal measures? GS: Almost certainly…
“Phase 4 suggest that Congress might enact measures expanding the deficit by another $500bn (2.4% of GDP) or so in the remainder of 2020, on top of the recently enacted policies, with additional fiscal expansion of another $1 trillion or so cumulatively in 2021 and 2022”

Mike Wilson of Morgan Stanley:
“This time, we have a potentially much more inflationary combination of an unprecedented targeted fiscal stimulus and possible deregulation of the banks to get the cash into the hands of lower income individuals and small businesses that are inclined to spend it. Such a dramatic shift in US fiscal and monetary…[Read more]

CS Strategy joins GS, JPM, MS etc in “consensus-calling” for equity markets to turn lower….

“We still have not seen all the preconditions we would expect for a market low. We believe that a consolidation/move down over the next month is likely, but that the old lows will hold. We stick to our targets for the S&P 500 of 2700 for year end”

Check out our Weekend Futures market update video with Wayne Nelson of Finom Group https://www.dropbox.com/s/9zecwd9pvv5y0fo/1024-Wayne-04-05-2020__05.58.717_PM.webm?dl=0

Morgan Stanley Cross-Asset Sunday call: next 2 weeks will be more tactically challenging
1. we are past the beneficial flows around month-end re-balancing

2. sees potential for renewed funds outflows cross-asset

3. we are past peak market uncertainty but not past peak macro uncertainty

4. earnings seasons will be downbeat

5. US covid news will…[Read more]

Will send out the latest J.P. Morgan Strategy Report Monday morning

BofA on capitulation
March capitulation: historic $284bn out of bonds and $658bn into cash in past 4

weeks ($64bn out of equities = sideshow).

Bond capitulation: record month of redemptions from IG bonds ($156bn), EM debt ($47bn), Municipal bonds ($24bn), HY bonds ($23bn).

The consensus analyst estimate pegs the decline in payrolls for March at 150,000, although the range of estimates suggests the result is anybody’s guess. The most pessimistic estimate pegs the decline at 1.25 million, while the most optimistic analyst expects an increase of 100,000 payrolls. As with everything else, the wide range of estimates i…[Read more]