I’m frequently asked if the recent improvement in the economic data might be a seasonal glitch. Not according the analysts at Nomura (who first noticed it): Diminishing seasonal bias
We first alerted clients to a pattern of “seasonal bias” in the data in October 2011 and followed closely its implication for financial markets. At that time, we warned of a curious pattern that emerged after the financial crisis in which stronger-than-expected data late in the year and early in the next suggested a relatively robust recovery only to disappoint when the data turned softer in the late spring and summer. We further noted that –notwithstanding the effect of specific events – shortcomings in the methods used to seasonally adjust time-series data appeared to have contributed to that pattern.
While the bias appears to have impacted market perceptions on the underlying momentum of the economy since 2009, it is important to recognize that seasonal bias has lessened over time and, moreover, has become largely immaterial.
emphasis in research note
If the data weakens in Q2, it will probably be because of the sequestration budget cuts and not some “shortcoming” in the seasonal adjustment method.
Monday economic releases:
• At 10:00 AM ET, the ISM Manufacturing Index for March will be released. The consensus is for PMI to decrease to 54.0%. (above 50 is expansion).
• Also at 10:00 AM, Construction Spending for February. The consensus is for a 1.1% increase in construction spending.
Weekend:
• Summary for Week Ending March 29th
• Schedule for Week of March 31st
The Asian markets opened red tonight with the Nikkei down almost 1.0%.
From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 3 and Dow futures are down 22 (fair value).
Oil prices are down slightly with WTI futures at $97.04 per barrel and Brent at $109.95 per barrel.