Markets: The upward move continued as retail sales blew away expectations.
The S&P roller coaster last week: flat, up, down, solidly up, and up.
Fed: Their balance sheet is now $7.8 Trillion. For perspective, it was $4.2 Trillion at the end of February 2020. In addition, the third Beige Book of the year economic activity increased at a moderate pace across the country. In the Cleveland District economic activity accelerated across the entire district. Why? The additional government stimulus and vaccine availability were given as reasons for the increased optimism and activity.
Housing: Starts were up +19.4% in March, and YOY are up +37%.
Industrial production: The number disappointed. Coming off of a -2.2% in February, the March rebound was expected to be +2.8%. The actual number was half of that at +1.4%. Markets ignored the news.
Inflation: The Fed has wanted inflation to run over 2%. Well, we’re there. The YOY Consumer number has moved from 1.4% up to 2.6% in three months. The Wholesale number has moved from 0.8% up to 4.2% in that timeframe. Now the questions is… how hot will the Federal Reserve allow the economy to run?
Jobless claims: The number was much lower than expected (695,000), coming in at 576,000.
Radio: Last week Bill & I discussed Fed Chair Jerome Powell’s 60-Minutes interview. Here’s the link… https://www.podbean.com/ew/pb-5dc6e-100df0c
Retail Sales: A huge beat. Coming off of a -3.0% February retail sales number, the March rebound was expected to be over +5%. The actual number came in at +9.8%. Wow! Retail sales, YOY, are up +27.7%.
Focus of the week: Markets are down a bit as I write this. Reportedly this is due to weakness in the tech sector. It’s a light data week, although there will be a couple of housing numbers updating towards the end of the week.
Indicator focus: Existing home sales, jobless claims (Thu), and new home sales (Fri).