The market focuses on today and trends in the road ahead, and here in the middle of June, it’s seeing some green shoots in the road to recovery. These green shoots are timely economic data that continues to provide insight into the US economic recovery.

“The good news is that much of the real-time economic data is showing tangible evidence that economic activity, while still really depressed, is beginning to come back,” said LPL Financial Chief Investment Officer Burt White.

For more of Burt’s thoughts on recent economic activity and key trends to watch, please watch our close-up, real time ed

Stocks staged perhaps the strongest rally in history—a more than 44% gain for the S&P 500 Index from March 23 through June 8—before pulling back about 6% late last week. With so much economic healing ahead of us and a still-uncertain path for COVID-19, the key question for investors is whether stocks are pricing in an overly optimistic scenario for the recovery in economic activity and corporate profits.

Markets Reflect a Lot of Optimism

Our expectations for a gradual economic recovery in the second half, discussed here last week, appear to be in conflict with the stock market’s rapid ascent over the pa

Real-time data continues to provide valuable insight into the current state of the US economy even as traditional economic data is too slow to pick up changes that are occurring.

Today we revisit some of the real-time data points that we are monitoring and find that while there is clearly a long way to go, there are green shoots indicating the US economy is on the road to recovery. Following the COVID-19 lockdowns and business closures in March and April, all 50 states have now reopened to some extent and we can already see the impact of the reopening in the real-time data.

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Index Performance – Week ending 6/12/2020

S&P 500 Index:  -4.8%

Dow Jones Industrial Average:  -5.6%

Nasdaq Composite:  -2.3%

Equities

US equities sold off this week, as the S&P 500 Index posted its largest weekly loss since late March. The Nasdaq outperformed amid the sell-off, bearing similarities to action seen in February and March.  Last week’s winners were this week’s losers as energy, financials and industrials all retreated more than 6%. Technology was the bright spot, down only a fraction this week. Small and mid-caps underperformed with the Russell 2000