Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)In contrast to the below 50 print in ISM, the February final S&P Global manufacturing PMI was 52.2 and that’s the best print since July 2022 and the 2^nd month in a row above 50. As what we’ve been looking for, they said “After a long spell of reducing inventories in order to cut costs, factories are now increasingly rebuilding warehouse stock levels, driving up demand for inputs and pushing production higher at a pace not seen since early 2022.”

2)The January PCE inflation data was as expected, up .3% and .4% headline and core m/o/m and 2.4% and 2.8% y/o/y.

3)We did see a slight rise in the savings rate to 3.8% from 3.7% as income surprised to the upside with its 1% m/o/m increase vs the estimate of up .4%. The income figure though was influenced by jumps in dividend and rental income. Private sector wages/salaries rose a more modest .3% m/o/m. Spending was as expected, up by .2% m/o/m

4)Shipping prices receded again with the World Container Index trip from Shanghai to Rotterdam falling by $277 w/o/w to $3,944. On this recent run it got as high as $4,984 after finishing 2023 at $1,667. The cost of a container from Shanghai to LA fell $197 w/o/w to $4,486. It recently peaked at $4,771, after bottoming at $1,939 in December.

5)The new Apartment List National Report said "The rental market turned a corner in February; after six consecutive months of rent declines, prices ticked up .2% this month" but is in line with seasonal behavior after the holidays. Versus last year, new rents are down 1% but as seen in the chart, still very elevated from where they were pre Covid. Because of all the supply coming on line this year, the vacancy rate ticked up to 6.6%. Of the 100 largest cities surveyed, 57 saw rents up in the month from January but only 43 y/o/y. Sun belt states are seeing the greatest new supply and thus the most amount of rent pressure. 

6)From Dell: "Our strong momentum in the AI build out continues as we believe Dell is uniquely positioned with our broad portfolio to help customers build GenAI solutions that meet their performance, cost and security requirements."