Rover's Weekly Market Brief — 5/18/2018

Economy

Advance estimates for retail sales were +0.3% in April, and sales for March were revised upwards from +0.6% to +0.8%. After a -0.5% drop in February, motor vehicle sales recoved +2.1% in March, but slowed to a +0.1% gain in April, and were up for the year by +4.3%. Increasing prices helped push gasoline sales up +0.8% in April, and + 11.7% for the year. Retail sales not including motor vehicles or gasoline were up +0.4%, and +4.8% for the year with notable increases for miscellaneous retailers (+0.9%, +4.1% Y/Y), furniture stores (+0.8%, +6.1% Y/Y), and nonstore (i.e. online) retailers (+0.6%, +9.6% Y/Y), and drops in sales for personal care stores (-0.4%, -0.5% Y/Y), restaurants (-0.3%,+3.8% Y/Y), recreational goods stores (-0.1%, -1.1% Y/Y), and electronics/appliance stores (-0.1%, +1.7% Y/Y).

Housing construction slowed in April as drops in multifamily construction dragged down the seasonally adjusted annual rate (SAAR) for both permits and construction. Multifamily permits dropped -7.4% overall, with the largest drop in the Northeast (-49%), while permits for single family homes edged upward +0.9%, with the largest gains in the South (+4.8%). Construction starts were also down -3.7% overall, with the Midwest (-22.4%) having the largest drop in multifamily starts and the South being the only region with an increase in single family construction at +17.2%. On a yearly basis, construction starts increased from a SAAR of 1.165 million to 1.287 million (+10.5%), with the largest gains in single family units in the South, and home completions were up from a SAAR of 1.095 million to 1.257 million (+14.8%), with the largest gains for multifamily homes in the South (+48,000) and Northeast (+44,000) and single family homes in the West (+48,000).

Industrial production rose +0.7% in April for its third consecutive monthly increase, and March’s increase was revised upward from +0.5% to +0.7%, while February’s was revised downward from +1.0% to + 0.4%. Manufacturing output was up +0.5% (+1.8% Y/Y), as capacity utilization increased +0.9% over the last twelve months to 75.8%, 2.5% below its long run average. Production was up across all major market groups, with the largest increases in consumer goods (+0.9%, +3.4% Y/Y), business equipment (+1.2%, +1.3% Y/Y) and defense (+1.5%, -1.0% Y/Y). In consumer goods, a drop in automotive products (-1.1%, +3.3% Y/Y) and home electronics (-0.9%, +4.5% Y/Y) helped bring production for durable consumer goods to -0.6% (+2.3% Y/Y), while nondurable goods increased +1.4% (+3.7% Y/Y), with the largest increases in energy +1.2% (+6.5% Y/Y), clothing +1.4% (+1.2% Y/Y), and paper products (+1.2%, -3.9% Y/Y).

Upcoming Economic Reports:

Wednesday May 23 – Federal Open Market Committee (FOMC) Minutes

Friday May 25 – Durable Goods Orders

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Nordson (NDSN)	TJX Companies (TJX)	Volkswagen (VLKAY)	Medtronic (MDT)	CAE (CAE)
Pure Storage (PSTG)	Intuit (INTU)	Lowes (LOW)	Ross Stores (ROST)	Foot Locker (FL)