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Powering the Endless Rally is a real-time reopening dataset

(Bloomberg) – Amusement park tickets. Business class airline reservations. Traffic driving at McDonald’s. Now more than ever, investors are relying on real-time data to boost their optimism about the US stock market. They’re sifting through an ever-widening array of snapshots at a time when some government numbers are distorted by comparisons a year ago with an economy hampered by a recession. Of course, no one needs to. esoteric datasets to see that the United States – once the epicenter of the pandemic – is on the mend, notes Paul Hickey, co-founder of Bespoke Investment Group. Deaths are falling, vaccinations are increasing and consumers are spending again. But with the rapid rally in books and stocks perched at the highest valuations in two decades, the hunt for indicators is on to refine the bullish case – or uncover an early warning signal to exit before being blinded by a The following is a look at what market professionals say they are watching: Planes, Trains, and Jobs Bryce Doty, of Sit Investment Associates, scours travel websites. It checks destination hotels, resorts, Disney theme parks – everything to gauge availability in midsummer. If he doesn’t look at those sites, he sees how long it takes for ships to unload cargo on the west coast, where there are backlogs. Another metric is modal car deliveries – it’s an approximation of the number of retail freight moving across the country. All of them have helped the Minneapolis-based senior portfolio manager define his investment strategy over the past year. Recently, he has seen the move to permanent posts “explode”. He kept an informal eye on the help-seeking signs in the stores. “We are constantly on the lookout for these types of real-time indicators.” JJ Kinahan, Chief Market Strategist at TD Ameritrade, monitors the percentage of total flight bookings made up by business travelers. This is because the number of vacationers could drop once school starts, while business travelers could be all year round. “For me, this will be the ultimate sign that we’ve turned the corner,” he says. The number of passengers per day passing through TSA checkpoints has increased, averaging 1.4 million over the past month. While this is still down from 2019 levels, the numbers have risen steadily – they averaged around 850,000 in December, for example, when many were traveling on vacation. Compared to 2019, daily restaurant bookings through OpenTable have increased since the start of the year, although they have not yet fully recovered. For Jeff Schulze of ClearBridge Investments, this data is useful because it allows him to see to what extent consumers are reverting to pre-pandemic routines. The investment strategist says everything from restaurant reservations and the number of passengers on planes to Google’s mobility data, provides insight into how people are engaging in the services side of the economy. Investors will be indebted to these statistics as long as the virus remains a threat to the economy – but a drop in cases will be a catalyst for growth. “The data continues to surprise economists, and I think if this trend can continue, you ‘will continue to see a market that goes higher into the summer,” Schulze said. “The trends are very much in the right direction, the mobility measures are going in the right direction.” More Drive-Thrus, Less Lounge Wear Chris O’Keefe, managing director of Logan Capital Management, says he analyzes announcements from consumer discretionary companies like McDonald’s and Nike to assess lifestyle changes as people become more comfortable leaving their homes. “The pent-up demand is phenomenal, everyone wants to go out and go and eat and travel,” he said. “You can feel the prison escape as people move around and do more.” For McDonald’s, it looks at driving traffic, which it expects to increase as people return to work, as well as the number of diners inside its restaurants. “People are still slow to switch to this, but the trend is accelerating,” O’Keefe said. It’s also keeping a close eye on Nike for signs that customers are buying more traditional athletic clothing and footwear – and less loungewear. – including stocks in travel, hotels and airlines – could “turn big”, according to Tom Lee of Fundstrat Global Advisors. Small cap stocks as well as sectors like energy could also benefit. “This is a significant bullish move for stocks,” he wrote in a recent note. Credit card use is also rebounding strongly. For the week ending April 24, total card spending based on Bank of America credit and debit cards increased 45% year-over-year and 20% on a two-year basis. years, wrote bank economists Michelle Meyer and Anna Zhou in a recent memo. This data is useful for gauging consumer activity, said Tom Martin, senior portfolio manager at GLOBALT Investments. While spending stats aren’t the only data point he and his team consider, they do influence their decisions. “People put things on their credit cards – you’ve got a good database of that.” Traditional Indicators More traditional economic indicators also point to a resumption of economic recovery. U.S. economic growth accelerated in the first three months of the year, with personal consumption – the bulk of the economy – surging 10.7% annualized, the second fastest pace since the 1960s. The 13-month low and US retail sales posted the second-largest monthly gain on record last month, as stimulus and a wider reopening of the economy fueled consumer spending. the Institute for Supply Management factory index which climbed to its highest level in 37 years in March. “We’ve seen very substantial advances in vaccines in a lot of places, we’re seeing economies reopening, we’re seeing how pent up demand is,” Randy Frederick, vice president of trading and derivatives at Charles Schwab, said by phone. “It’s a good thing and these things are relevant – and what we’ve seen the market do is extend their timeline to get ahead on the economy. The market is always one step ahead of the economy. For more articles like this, please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business information. © 2021 Bloomberg LP



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