US Trade Balance

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, April 4. The Bottom Line segment of today’s podcast starts at (3:21) for listeners who want to skip ahead.

State of Play

Stocks finished roughly unchanged yesterday after Fed Chair Jerome Powell said very little in his speech. As we look at our board of indicators at 0630, all is pretty quiet:

• Stock index futures are pointed to a higher open, led by tech. The Nasdaq is up 0.5% with S&P 500 futures up 0.4%;

• In commodities the only real movement is in copper prices, which are up 1.4%. WTI crude oil is unchanged at $85.50;

• No action at all in cryptos. Bitcoin is flat, changing hands around $66,500;

• Bonds are unchanged. The 10-year yields 4.36% whilst the 2-year yields 4.69%.

Today’s Known Events

A pretty slow day. The US reports its trade balance for February at 0830. Economists who were surveyed expect a trade deficit of $66.9 billion, down a bit from the $67.4 billion recorded last month. Remember that the US running a trade deficit is a good thing for the global economy seeing how Americans make up the largest single block of consumers. So if the US is exporting more than it exports, it means Americans are buying a ton of stuff, most of which they don’t need.

It’s Thursday so we’ll get initial jobless claims at 0830. Economists expect 213,000 new claims, roughly in line with the 210,000 seen last week and right in line with the four-week average of 213,000.

There are a few more Fed speakers on tap today but it’s so unlikely any of them will say anything that moves markets that it’s not even pointing out who they are.

The Bottom Line©️

So yeah, a pretty slow day. If you were looking for signs of a top in AI stocks, Jim Cramer just said “the AI buzz is far from a bubble — the game has yet to start.” If nothing else maybe that will lead to the pullback we’ve all been waiting for.

Otherwise it’s hard to see what will have investors do anything drastic today — or much of anything for that matter. Another good test of our physics hypothesis then? A bull market in motion tends to stay in motion…