It was another great session for the market, which had plenty of chances to give up the ghost and go back into survival mode. It’s been a very impressive week for sure. The market breadth was impressive, especially on the New York Stock Exchange (NYSE), which saw 6.6 billion in up volume against 1.1 billion in down volume.

There are two channels for the S&P since hitting an all-time high in February. The longer-term channel indicates major resistance ahead of 2,700, and the most recent channel is when the market moved into free-fall mode. That channel was crossed on Tuesday, perhaps triggering some of the buying we’ve witnessed over subsequent sessions.

SPCFD, SPX 60

Portfolio Approach

Getting Back to Work

I'll be working my way back to you, babe, with a burning love inside

Yeah, I'm working my way back to you, babe, and the happiness that died

I let it get away

-The Spinners

I have always been a big proponent and believer in the dignity of work. It’s an immeasurable part of our lives that goes well beyond earning a paycheck. America’s roots are steeped in faith, and the need to help and defend others. It’s our wealth that has allowed us to come to the rescue of the world on several occasions.

It’s that wealth and the way of life it generates that’s under assault. Never has it been forced to be put on pause, and the pain is coming fast and furious. President Trump gets this, and so do millions of Americans. To talk about it is not the suggestion of killing the Greatest Generation.

On the contrary, the Greatest Generation understands the need to keep the economy healthy for younger generations and the nation’s preeminence. I don’t know when we should go back to work as a nation, but it should come in waves based on state-by-state risks. 

Putting Auto Building Back in Gear

“Chop your own wood and it will warm you twice.”

-Henry Ford

Yesterday, the auto industry chimed in with new proposed dates, which I think are a good guidepost for the administration and other elected officials. Keep in mind these dates were all moved and could move again, but it’s smart to be ready and have a game plan.

The United Automobile Workers (UAW) is upset with the idea of auto workers going back to work in April; however, there is an economic reality that even union bosses should understand.

This was sent to workers at Toyota Motor Manufacturing Indiana (TMMI), Gibson County, Indiana Plant.

Plant officials sent a statement saying they will resume on April 20.

Due to the ongoing COVID-19 pandemic and decline in vehicle demand, Toyota is further extending the length of its production suspension at all of its automobile and components plants in North America, including Canada, Mexico and the U.S. The manufacturing facilities, including Toyota Indiana, will remain closed through April 17, resuming production on April 20. Our service parts operations and finished vehicle logistics centers will continue to operate in order to continue meeting the needs of our customers. We will continue to monitor the situation and take appropriate action in a timely manner.

We will pay Toyota Indiana Production, Skilled and Track team members through April 10, 2020. Given the sales impact to the business, we will not be able to extend the pay period beyond what has been designated thus far. Team members have the option to use personal time off or unpaid time off the week of April 13.

Yes, Congress passed a bill to beef up unemployment insurance payments and to extend eligibility, but it only goes so far. If there is evidence of a declining risk after moving past the local apex, critical industries should consider going back to work like the young woman who rang up my groceries at the local Stop & Shop last night.

Today’s Session

Our daily reminder the US economy was firing on all cylinders came from several earnings releases last night, including results from KB Homes (KBH), and this morning’s read on February Personal Income and Spending.  Incomes increased $106.8 billion or +0.6% well above the +0.4% consensus.  Farm income increased $34.1 billion to $59.2 billion, reflecting government assistance to offset the trade war.

Personal Income

Prescient Main Street

Even as income climbed in January and February, the savings rate was moving higher.  It’s not clear what mutative the increase in savings to 8.2% last month from 7.5% in December.  The savings rate is lower than a year ago, but that was also a period of angst, after the fourth quarter market selloff and the daily reports of a potential recession.

Equity futures have been under pressure all morning. It stands to reason, after the best three-day run since 1931, there could be some profit-taking.  Moreover, Fridays haven’t been particularly favorable for investors during the crisis, which makes it the best day to truly test investor willingness to return to the market.

This could be one of those days where we are looking for moral victory, which would be a session where the Dow doesn’t lose one thousand or more points.

I’m listening out for more coronavirus data out of Europe, especially after hearing Spanish authorities think new cases are reaching a peak.