Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)A time out was called on slapping the uniquely defined, via internal math, reciprocal tariffs on the rest of the world.

2)March CPI fell one tenth headline vs the estimate of a gain of one tenth. The core rate was higher by .1%, also two tenths below expectations. The y/o/y gains slowed to 2.4% headline and 2.8% core vs 2.8% and 3.1% in February. Weighing on the headline was the 2.4% drop in energy prices in part due to the drop in gasoline and fuel oil prices. Energy prices are down 3.3% y/o/y. Food prices in contrast rose by .4% m/o/m and by 3% y/o/y. ‘Food at home’ in particular was higher by .5% m/o/m and 2.4% y/o/y. ‘Food away from home’ saw a price gain of .4% m/o/m and 3.8% y/o/y. Services ex energy prices were up just one tenth m/o/m and by 3.7% y/o/y, though still driving overall inflation. The goods side remains where the disinflation has taken place with core goods down by one tenth m/o/m after gains in the prior two months. They are unchanged y/o/y.

3)March PPI unexpectedly fell 4 tenths headline vs the estimate of a rise of 2 tenths after a one tenth gain in February which was revised up by one tenth. The core rate was lower by one tenth vs the forecast of up .3% but half of that was due to a higher revision by two tenths to February. If we take out trade too, the figure was actually as expected when including the upward revision to the month before. Versus last year, headline PPI was up 2.7%, the core rate by 3.3% and ex food, energy and trade by 3.5% vs 3.2%, 3.5% and 3.5% respectively in February.

4)Initial jobless claims rose to 223k from 219k, though as expected and still remaining low, especially in light of everything going on. Continuing claims, delayed by a week and pre ‘Liberation Day’, totaled 1.85mm, down from 1.893mm in the week before.

5)This will get completely reversed and then some this week with the jump in Treasury and mortgage rates but at least thru 4/4 purchase applications rose 9.2% w/o/w and refi’s were up by 35.3%.

6)From CarMax: In terms of their quarterly sales cadence, "December and January were very strong. February was a little softer, which we expected given that we had leap day last year. We also think February is slightly impacted by the delay of refunds. And what I mean there is, if you remember, probably halfway through February, refunds were off significantly y/o/y. Now, they caught up pretty much by the end of February, but I think it pushed a little bit into March, as well as we had some weather impacts. Then we get into March, and we saw a step up that was a little stronger than the fourth quarter comp, and it continued the whole month until the end of March where we saw some strength - some additional strength, which continued and then accelerated into the first few days of April, which obviously we're early into April right now. From a comp standpoint, first quarter to date, we're running high single digits." But the tariff pull forward will lead to a hangover thereafter.