Equity markets are rallying into earnings season, despite unusually high uncertainty surrounding earnings estimates. Recent banking issues have put a spotlight on commercial real estate. Inflation data is coming in lower than expected, with relief in key categories for consumers. The prime age labor force participation rate has returned to pre-pandemic levels. Consumers are still flush with savings.
1. The highly anticipated bank earnings begin this week and roughly 60% of the S&P 500 by market cap will have reported by the end of the month:
2. Equity markets seemingly have high expectations:
3. But analyst estimates are displaying an unusual degree of uncertainty:
4. Higher interest rates, and lower occupancy rates in office buildings, have cast a shadow over commercial real estate and banks hold much of the sector’s debt:
5. Lagging shelter inflation continues to drive headline numbers but it’s notable that inflation outside of the major categories is falling:
6. A major slowdown in food inflation is a positive development for consumers:

Source: Daily Shot 4/13/2023
7. Workers outside of the “prime” 25 to 54 age range are responsible for the remaining gap in labor force participation:

Source: Daily Shot 4/10/2023
8. A return to pre-pandemic immigration rates would help to solve the labor supply issues:
9. Consumers are reluctant to spend their excess savings: