Housing starts in April totaled 1.724mm, 30k less than expected and March was revised down by 65k to 1.728mm. Separating out the two components, single family starts fell to the lowest level since October 2021 at 1.1mm. Multi family on the other hand rose to 624k from 541k and that is the most since 1986, 36 years ago. From a construction standpoint, assume multi …

Where is the ‘appropriate place’?
Target's top line was similar to Walmart in that comps were better than expected but below that line, they also experienced the same thing. "Operating margin rate of 5.3% was well below expectations, driven primarily by gross margin pressure reflecting actions to reduce excess inventory as well as higher freight and transportation costs" they said. That 5.3% margin …

Builders mood shifts down
The NAHB home builder sentiment index fell 8 pts m/o/m to 69 and that was well less than the estimate of 75. That’s the weakest since June 2020. All components saw sharp declines from April. The present situation was down 8 pts, the future outlook by 10 pts and Prospective Buyers Traffic by 9 pts to 52, just 2 pts above the breakeven level. The NAHB Chairman said …

Retail sales and trying to break out inflation
Core retail sales in April rose 1% m/o/m, 3 tenths more than expected. There was also the annual revision changes for the prior year plus that influenced the comparisons. Auto sales rose 2.2% m/o/m after the 1.6% fall in March and they are down 1% y/o/y and mostly because of the dearth of inventory as we know. Building materials fell .1% m/o/m and are down 1.2% y/o/y …
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HD, WMT/College tuition costs/TIC data/Other
Ahead of April retail sales today, Home Depot is proving that at least for now people keep spending on their homes with comps better than expected (we'll wait to see how much is volume and how much is price). The CEO said in its press release, "Fiscal 2022 is off to a strong start as we delivered the highest first quarter sales in Company history. The solid …
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NY mfr’g contracts for 2nd month in past 3
The May NY manufacturing index, the 1st May industrial number to be reported, was much weaker than expected and in contraction at -11.6. The estimate was +15 and that is down from 24.6 in April and is the 2nd month out of 3 below zero as March printed -11.8. Again, I’ll compare the internals with their 6 month averages. New orders were -8.8 vs the 6 month average of …
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The difference this time
Outside of the covid market plunge, every notable stock market correction of between 10-20% since 2010 (and many times before then but let's stick to this time frame) coincided with either the end of QE, the tapering of it, the shrinking of it and rate hikes. That of course is now happening again but the difference this time is inflation as the response to those …

Succinct Summation of the Week’s Events – 5/13
Positives 1)Continuing claims fell to a new cycle low and fresh 50+ yr low at 1.343mm from 1.387mm last week. 2)Import prices in April were flat m/o/m vs the estimate of up .6% but half of that is explained by the 3 tenths upward revision to March which spiked by 2.9% in the month alone. Ex petro, prices rose .4%, 3 tenths less than expected and March was …
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Stagflation bites
The preliminary April UoM consumer confidence index fell to 59.1 from 65.2 last month, 5 pts below the estimate and the weakest read since August 2011. For perspective, the April 2020 low was 71.8 and the 2008 recession low was 55.3. Both main components contributed to the decline. One year inflation expectations held at 5.4% for the 3rd straight month and the 5-10 yr …

Import, Export prices
Import prices in April were flat m/o/m vs the estimate of up .6% but half of that is explained by the 3 tenths upward revision to March which spiked by 2.9% in the month alone. Ex petro, prices rose .4%, 3 tenths less than expected and March was revised up by one tenth to 1.2%. Versus last year, headline prices are up 12% and ex petro by 7.8%. Take out all food and …