The unexpected is continuing to occur. Retail sales rose by 0.6% after declines in the prior two months, exceeding all estimates. The 0.6% increase greatly exceeded the 0.1% estimate. Moreover, weekly jobless claims declined versus rising and import prices declined year over year as opposed to increasing. Furthermore, export prices rose versus remaining flat and are up considerably year over year.
Many have made declarative apocalyptic statements with the harshly negative forecasted outcomes being pushed further out. The Federal Reserve has opined that tariff induced inflation will emerge, but the question is as to when and how much. Five months ago, the Central Bank was forecasting “robust inflationary pressures” in the early to mid-spring.
Market share is being defended by absorbing costs but how long can this strategy last? Will AI protect corporate margins, hence valuations?
The questions, the outcomes are infinite.
Commenting on yesterday’s markets, Treasuries were essentially flat. Equities rose as the NASDAQ posted about a 0.75% advance. Dow rose by 0.25%.
Today a confidence survey and several housing statistics are released. How will the data be interpreted?
Last night the foreign markets were mixed. London was up 0.03%, Paris down 0.01% and Frankfurt down 0.24%. Chona was up 0.50%, Japan down 0.21% and Hang Seng up 1.33%.
Futures are flat as earnings are generally beating dumbed down estimates. The 10-year is up 3/32 to yield 4.42%.
Kent Engelke
Chief Economic Strategist Managing Director
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.
