Are earnings and manufacturing about to rise?

Highlights:

Market Summary: Markets were higher yesterday as the S&P 500 rose 0.67%. The top performing equity market was emerging markets, which moved up 1.62%. Interest rates dropped 2 basis points on the 10-year yield and bonds went up as a result. The dollar was also stronger by 0.17%. Gold, copper, and oil fell as a result of dollar strength. Small caps also moved lower, diverging from other equities.

Economic Data: Yesterday, initial jobless claims came in at 214k, down from 223k previous. Continuing jobless claims were up to 1803k from 1728k.

Emerging Markets: Emerging markets rallied against the S&P 500 yesterday, beating the U.S. market by 0.95%. The ratio of emerging markets to the S&P 500 is still in a negative trend, below its 200-day moving average. If global growth was accelerating, we would expect this ratio to move upward.

Volatility: The VIX retreated back to below 13 and is close to testing support again. The VIX failed to rally above the 200-day moving average and made another lower high. It is surprising that the VIX index has not sustained a break below 12 and moved to new lows. The VIX has not made a new low since the beginning of 2018.

Oil Priced in Gold: If you look at West Texas Intermediate Crude oil, priced in gold, it becomes clear that this ratio remains in a negative trend and well below the highs of 2018. It has made a series of lower highs since that peak and is below the 200-day moving average. The recent breakdown has us questioning whether the inflationary move we have seen recently is just a flash in the pan.

Chart of the Day: Are earnings and manufacturing about to rise? Cornerstone macro outlines several indicators, like interest rates, money supply growth, and housing that suggest that is precisely what should happen.

Futures Summary:

News from Bloomberg:

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Risk assets are ending a volatile week on a high, with S&P 500 futures rising with equities in Europe and Asia. Treasury yields and the dollar were steady before the payrolls report. Gold slipped with the yen. Oil headed for its first weekly loss since November.