Updated: 21-May-09 10:19 ET

April Leading Indicators

Updated: 21-May-09 10:19 ET

Highlights

• As expected, the Leading Indicators report for April brought some pleasing news showing an increase of 1.0%.  That was actually a bit above the 0.8% consensus estimate and a marked improvement from the -0.2% decline in March.
• Stock prices were the lead difference this time around, as they contributed 0.44% to the increase.  The interest rate spread (0.28%), consumer expectations (0.27%), jobless claims (0.16%) and the average workweek (0.13%) also provided notable support.
• The main drags on the April number were M2 (-0.24%), building permits (-0.09%) and orders for nondefense capital goods (-0.01%), which are estimated by the Conference Board.
• The coincident index declined -0.2%, which placed its losing streak at six months while the lagging index declined -0.3%, marking its fourth decline in the last five months.

Key Factors

• The April reading also marked the first increase in the series since June 2008.

Big Picture

• The leading indicators index does not have a good track record over the past few years.  The index overestimated weakness in 2007 and early 2008.  This index typically does not have much market impact since most of its components are known ahead of time.