• 2 hours Gold Mid-Tiers Rally On Fresh Earnings Reports
  • 20 hours Can The British Pound Overcome Brexit?
  • 1 day Is A Gold Breakout Near?
  • 2 days Federal Reserve Downgrades U.S. Growth And Cuts Rate Hikes
  • 2 days Disney Beats Out Comcast In $71.3B Mega-Merger
  • 2 days The Feds Continue To Prop Up Equities Markets
  • 2 days Bejing's Sway In South China Sea Is Fading
  • 3 days Saudis Eye Billions As Stocks Get Emerging Market Boost
  • 3 days Airbnb In Acquisition Mode Ahead Of IPO
  • 3 days Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 3 days Champagne Sales Slow As European Economic Worries Grow Louder
  • 4 days Putin Signs “Digital Iron Curtain” Into Law
  • 4 days Russian Metals Magnate Sues U.S. Over Sanctions
  • 4 days Tesla Looks To Jump Into Indian Market
  • 4 days Global Banks Lay Groundwork To Re-Inflate Asset Prices
  • 5 days Homeowners Experiment With Risky New Investment Trend
  • 5 days U.S. Tech Stocks Look Increasingly Vulnerable
  • 5 days De Beers To Expand World’s Most Profitable Diamond Mine
  • 5 days Ford CEO Gets Raise After Massive Layoff Round
  • 6 days Germany’s Flirtation With Recession Could Cripple The Global Economy
Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

  1. Home
  2. Markets
  3. Other

Retail Irony: Sales Jump 1.3%, Treasuries Rally

Retail sales jumped 1.3% in April following yesterday's miserable stew of retail sales reports.

Last evening ZeroHedge sarcastically tweeted

Zero Hedge Tweet on Retail Earnings

He was correct.

For the second irony, the report was so good, that US treasuries rallied.

The Bloomberg Econoday consensus estimate for retail sales was 0.9%. Sales jumped 1.3%.


Highlights

The consumer snapped back to life in April, driving retail sales 1.3 percent higher to beat Econoday's consensus by 4 tenths and the high estimate by 1 tenth. Gains are spread throughout most of the report.

Autos are the key component, up a sharp 3.2 percent to reverse the prior month's decline. Excluding autos, retail sales rose 0.8 percent.

Sales at gasoline stations, boosted by higher prices, also contributed strongly, up 2.2 percent in the month. But even excluding both autos and gasoline, sales still rose 0.6 percent for the third straight gain, two of which are very strong.

Apparel was a big contributor in April along with nonstore retailers and with restaurants also showing a gain. The only component in contraction was building materials & garden equipment which hints at a little cooling for what has been very solid residential investment.

Year-on-year rates all improved though total sales remain very soft at 3.0 percent. Auto sales, pulled down by tough comparisons with very strong sales this time last year, are up only 3.1 percent on the year. But other components show strength with the ex-auto ex-gas rate at a healthy 4.4 percent for a 5 tenths gain in the month.

Today's report points to a solid start for the second quarter and gives some life to the possibility of a June FOMC rate hike.


Retail Sales Charts

Retail Sales Charts

Charts from Census Department Advance Monthly Sales.

Some of these numbers look peculiar so let's dive in further.

Retail Sales by Business Type

Department stores are not doing well to say the least. Non-store retailers are up a big 10.2% from a year ago, but that base is on a small number.

Here's a chart I posted yesterday in Retail Department Store Carnage: Amazon to Blame? Mish 12-Point Summation.


Apparel Market Share

Apparel Market Share

A 10% growth in something weighted 6% cannot fully explain a decline in sales at components that total 41.6% of the retailers.


June Hike?

Adding to the surreal nature of of today's retail sales numbers, US treasuries rallied.

Bond Prices

Every month the Bloomberg Econoday writers keep hoping, praying, and discussing rate hikes.

This is what the market thinks.

CME Group Fed Watch

A quick check shows the market does not expect a hike until December.


Yield Curve

Yield Curve
Larger Image

That chart is as of yesterday's close. Yield on the long end are down a couple ticks today.

The market does not see hikes are imminent, and neither do I.

 

Back to homepage

Leave a comment

Leave a comment