- The US NBER declared that the US economic expansion came to an end in February. This may not be entirely new information to financial markets. The announcement came as the S&P500 equity index hit a 15-week high. But equities and economics can diverge.
- The pandemic hurts small businesses more than listed companies - small businesses are more important to the economy. Some services will suffer more than the rest of the economy. GDP is unlikely to return to 2019 levels before the end of 2021, but structural change may be accelerated – this matters if discounting the next decade. Low rates will last longer, and fiscal stimulus is coming. Equity markets are not the economy. Are equities fairly valued? Fortunately, that is a question for strategists, not economists.
- The UK BRC retail sales data was relatively strong. This is messy data – closed stores are not included – but it suggests people are adapting in the crisis. In this case, shopping online seems to have increased.
- Trade data is due from France and Germany. Trade may become a political issue again, but other policies like tech taxes may be more of a concern than trade data. The US NFIB sentiment opinion poll can be ignored.