Succinct Summation of a Very Busy Week

Succinct Summation of a Very Busy Week:

Positives,

1)Direct Iranian attacks on Israeli soil for the very first time and the Israeli response could have been worse.

2)Initial jobless claims totaled 212k, 3k less than expected and unchanged with the week before. The 4 week average of 215k was also flat with last week. 

3)Core retail sales rose 1.1% m/o/m in March, well better than the estimate of up .4% and February was revised up by 3 tenths to a .3% gain. Notwithstanding the seemingly strong figure, the internals were VERY mixed.

4)The April Philly index bounced to +15.5 from +3.2 and that was well above the estimate of +2.0. The internals though were hugely volatile and much more mixed. As for the 6 month business outlook, after jumping to the highest since the summer of 2021 last month, it receded slightly.

5)In the fresh TIC data for February (thus still somewhat dated), foreigners bought a net $88.8b of US Treasuries, a needed bid even as they sold off. Japan added $16.4b to their holdings and remains the largest foreign holder at $1.17 trillion, though off about $150b from its late 2021 peak. China shed $22.7b and their holdings have shrunk to $755b, just off the smallest amount since 2009.

6)Even with another rise in mortgage rates, purchase applications did rebound by 5% w/o/w after falling by 4.7% in the week before. Refi's were little changed.

7)The April NAHB home builder index held at 51 as expected and the 2^nd month in a row above 50 for the first time since last summer. However, the pool of buyers as measured by Prospective Buyers Traffic remained well below 50 at 35 vs 34 in March. The NAHB said “April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed.” And the NAHB is calling on policymakers to reduce “inefficient regulatory rules that raise housing costs and limit supply.”

8)US March industrial production was higher by .4% m/o/m as expected but February was revised up by 3 tenths and the bounce was led by manufacturing. Capacity utilization ticked up to 78.4% from 78.2%.

9)Container shipping rates continued to cool, down for a 12^th straight week, though still about double the level it started the year.

10)From JPM: "Consumers remain financially healthy, supported by a resilient labor market. While cash buffers have largely normalized, balances are still above pre-pandemic levels and wages are keeping pace with inflation. When looking at a stable cohort of customers, overall spend is in line with the prior year."