Risk markets were positive overnight on the perception that the Syrian missile strikes were an isolated event and not the start of a prolonged military campaign. S&P 500 futures are currently up 15 points, and the Treasury curve is modestly steeper. Investors remain anxious of the three primary macro headwinds (geopolitics, trade tensions, and the Trump/Cohen investigation), but at the same time, the economic data trend and corporate earnings remain solid. Regarding the data trend, March retail sales were largely in line with expectations. Headline sales were boosted by strong auto sales (0.6% vs. 0.4% expected), and the control group matched expectations with a 0.4% gain. The control group is used in the GDP calculation, and the March reading was the first positive figure since last November. The data calendar is relatively light for the rest of the week, but there will be several Fed leaders speaking this week, including Fed Governor Randal Quarles (Vice Chair for Bank Supervision) testifying before Congressional committees.
Managing Director, Investment Management Group