US Economic Data and the Markets Over the Next Two Weeks

 Here are some broad-based thoughts on US economic data and the stock and Treasury markets over the next two weeks. The data should be bullish stocks and bearish Treasuries through Wednesday and then reverse on Thursday.  The data risk surprising on the softer side in the following week.

Next Week
Stronger US economic data are likely to dominate through Wednesday in the coming week.  While they are minor or volatile, they should support stocks and weigh on Treasuries into Wednesday's FOMC Meeting.  The FOMC Statement should differ little from the March Statement, which looks to cover the downside global risks previously highlighted by Yellen.  Stocks and Treasuries nevertheless risk reversing to some extent their movements on Thursday when softer US economic data are expected -- Q1 Real GDP and Initial Claims.  Also, the stock market tends to reverse the d/d direction the day after an FOMC meeting.  Month-end buying would work against such a pullback in stocks or, at the minimum, mitigate it, however.

First Week of May
US economic data could surprise on the softer side, which would help Treasuries.

1.  At this point, early evidence suggests a dip in the April Mfg ISM. 

2.  A slowdown in April Payrolls to under 200k m/m cannot be ruled out --  it being a lagged response to the Q1 GDP slowdown.  While the Claims data strengthened in April, they are not reliable predictors of speedups/slowdowns in Payrolls.