Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)The Fed, BoE, Riksbank and Taiwanese central bank all held rates as expected as they await some parting of fog in the front windshield. The Brazilian central bank raised its Selic Rate by 100 bps to 14.25% to fight inflationary pressures with a faltering, spendthrift Lulu government.

2)Core US retail sales in February rose 1% m/o/m, well above the estimate of up .4%. It though follows a 1% drop in January which was revised down from an initial .8% fall. Core sales y/o/y were basically flat in February, up by .3%. The internals were very mixed.

3)The Philly regional March manufacturing index was +12.5 vs +18.1 in February but above the estimate of +9.0.

4)Housing starts in February totaled 1.501mm, well above the estimate of 1.385mm and up from 1.35mm in January (revised down by 16k) and vs 1.526mm in December. Single family starts got back what it lost in January and then a bit some at 1.108mm. Multi family starts, very volatile month to month, were 393k vs 355k in January, 437k in December and 284k in November. Weather messed around with the data as starts (both single and multi family) in the Northeast fell by 50k in January but rebounded by 46k in February. The South had bad weather too and starts were 895k in December, 689k in January and 815k in February. Permits were little changed m/o/m with single family at 992k, down 2k from the month before. Multi family totaled 464k vs 479k in January and at a 4 month low.

5)Existing home sales rose to 4.26mm in February annualized, up from 4.09mm in January and above the estimate of 3.95mm, though still hovering around 30 yr lows. Months’ supply held at 3.5 while the median home price rose 3.8% y/o/y. First time buyers made up 31% of purchases vs 28% in January and 31% in December. With high mortgage rates still, ‘all cash’ buyers rose to 32% from 29% in January, 28% in December and 25% in November. The NAR said, “Home buyers are slowly entering the market. Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”

6)The Cass Freight shipments data rebounded in February after the weakness in January. They said "While the outlook is fraught with uncertainty, and freight demand will be challenged by tariffs, we highlight a silver lining for the for-hire freight market amid rising recession risk. Elevated uncertainty may be turning the tide of private fleet capacity additions after along for-hire downturn."

7)US industrial production in February rose .7% m/o/m, well above the estimate of up .2%, partly offset by a 2 tenths downward revision to January. The manufacturing component was the main reason helped by a rise in auto production. Unclear to what extent all of this was pull forward behavior ahead of tariffs.

8)From Darden: Olive Garden comps were a touch positive, up .6% and "continues to use news to appeal to core guests as well as value seekers in this environment" as one offering entails "With a price starting at $14.99, guests choose from seven entrees for their dining experience and then take a second entree home." With LongHorn, "Through the first three weeks of March, LongHorn has seen strong traffic and same restaurant sales growth further increasing their positive gap to the industry."