This is the email Bank of America's economist Hans "Great Rotation" Mikkelsen blasted out moments ago, without shame and without the embarassment that thousands of people would read this and burst out laughing.
First, this is what the same BofA sent out last night:
Retail Therapy for the economy, not markets. Following better readings on the US economy over the past week - including ISM non-Manufacturing and weekly Jobless Claims - the markets have now more than priced out the impact of last Friday's very weak US jobs report for March. Looking forward to next week we have been looking for US economic data to bounce back starting with Retail Sales for March, which is released on Tuesday (4/14), as the weather improved significantly during that month. To that end our own BAC card spend data for March showed a sharp rebound in core (ex. autos and gasoline) spending to +0.9% (MoM, SA). That suggests the rebound in the US economy is alive and well, and that the Fed's acknowledgement of weakness at the March FOMC meeting may have marked the trough in data.
Fast forward to moments ago when the same analyst sent this:
March ... again saw a relatively weak rebound in activity, and a downward revision to the prior (weather impacted) month. Obviously the problem with this reading on the US economy - like last year - is that it confirms other weak data. However, with last year's experience fresh in mind at the very least we should recognize the U.S. Census Bureau data for what it is - namely an initial estimate of retail sales. The actual number, due out in a month, could be very different. Furthermore, while it is easy to connect two points with a line, one could logically speculate that the Census Bureau tends to initially underestimate the severity of downside impact of adverse weather on retail sales, and then initially underestimate the rebound on the other side. With that view, which again admittedly amounts to curve fitting two data points, it seems not unreasonable to suspect that the March 2015 reading on retail sales gets revised up next month. Hence the intra-day rebound today first in stocks, later in interest rates after the initial declines on the disappointing retails sales report make sense -
And the absolute punchline: all of this comes from the same bank which a few days ago showed us that this "harsh winter"... was actually warmed than usual!
[5]
And this is what passes for goalseeked narrative and commentary fitting among Wall Street's economisseds today.
