Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)March PPI rose .2% headline and core with the former one tenth below expectations while the latter was as expected. Versus last year, wholesale prices grew by 2.1% headline and 2.4% core. Energy prices fell by 1.6% m/o/m and is down 1% y/o/y. Food prices were up by .8% m/o/m and 1% y/o/y.

2)Coincident with flattish y/o/y change in goods prices, import prices of stuff in March reflected the same thing ex energy. Price gains were flat ex food and fuels m/o/m and down .4% y/o/y. Energy import prices though jumped 6% in the month and now up 7.5% y/o/y and at least month to date will continue in April. 

3)Initial jobless claims remain low, printing 211k, 4k less than expected and down from 222k last week. The 4 week average was little changed at 214k. 

4)Refi's jumped by 10% w/o/w after three weeks of declines notwithstanding the rise in mortgage rates.

5)C&I loans outstanding did rebound for the week ended 3/27 by $9.7b which does get back what it declined in the prior two weeks to just under $2.75 trillion.

6)From Andy Jassy on AWS: "People have moved from largely trying to save costs to figure out how to modernize their infrastructure...and how they can use generative AI to change their business."

7)From Delta: "Demand continues to be strong and we see a record spring and summer travel season with our 11 highest sales days in our history, all occurring this calendar year. Spending on services recently surpassed goods for the first time in five years and there is further runway to return to their long-term trends. Delta's core consumers are in a healthy position and travel remains a top purchase priority. Generational shifts and evolving consumer preferences are driving secular growth in premium experiences. And business travel demand has taken another meaningful step forward this year with growth accelerating into the mid-teens over last year." The CEO ended this view all bulled up by saying "this may be the most constructive backdrop that I've seen in my airline career."

8)In the UK, GDP grew by .1% m/o/m in February as expected after a .3% rise in January so they are technically out of a recession after the back half of 2023 modest contraction. Manufacturing production helped, led by autos. Services were flat and construction was down, impacted by weather said the ONS.

9)German industrial production, helped by the production of construction materials, was a beat with a gain of 2.1% m/o/m vs the forecast of up .5%. Production of autos and chemicals helped too. 

10)China's March CPI was up .1% y/o/y, below the estimate of up .4% but lower food prices remain the main reason. Prices ex food and energy were higher by .6% y/o/y which is not much different than the trend seen over the past year. Price stability actually. 

11)Taiwan, the semi powerhouse, said its March exports jumped by 18.9% y/o/y, more than double the estimate of up 7.5% and yes, it was driven by tech related products, especially AI chips.

12)Japan's higher wages showed up in the February data as base pay was higher by 2.2% y/o/y, the biggest one month increase since 1994. 

13)The ECB, Bank of Canada, Reserve Bank of New Zealand and the Bank of Thailand all left rates alone as expected but at least for the former June is a likelihood for a cut. 

Negatives,

1)March CPI rose .4% m/o/m both headline and core and that was one tenth above expectations for both. The y/o/y gains of 3.5% and 3.8% for each compare with 3.2% and 3.8% in February. Energy prices continued to rebound for a 2^nd month, up by 1.1% in March and higher by 2.1% y/o/y as gasoline prices jumped by 1.6% in the month. Food prices were up by .1% m/o/m and 2.2% y/o/y. Services inflation ex energy rose .5% m/o/m and remaining persistent with a 5.4% y/o/y gain. On the core goods side, that is where prices remain calm as they fell .2% m/o/m and lower by .7% y/o/y.

2)Continuing claims reflects still the slowdown in hiring we’re seeing everywhere except in the BLS data. This figure rose to back above 1.8mm at 1.817mm, the highest since mid January.

3)The NFIB small business optimism index for March fell to 88.5 from 89.4 and that's the softest read since December 2012. The NFIB's bottom line "Small business optimism has reached the lowest level since 2012 as owners continue to manage numerous economic headwinds. Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly."