Equity Market Action Tells Where the Concern Is - Growth

The tables show the data release dates and daily performance for CPI, Retail Sales and Unemployment. Some key points to note:

  • Market volatility related to inflation data has cooled. In the last five months the average size of the daily change of the S&P500 and volatility of the S&P500 has decreased on CPI days relative to the previous five months.

  • Market volatility related to growth data has increased. In the past five months market volatility on data release dates for Retail Sales and Unemployment have moved two to three times higher.

Market reactions, measured by the daily moves in the S&P500 on release dates, looks like a shadow of Fed remarks, tracking the shift in Fed rhetoric towards concern about growth versus inflation.

Caleb Sevian