Rover’s Weekly Market Brief – 04/28/2023

Dividend Investing – Part 1

We have started a brand new three part blog series on dividend investing in Stock Rover. This week we have posted part 1 ^[1], which covers screening for dividend stocks and ETFs.

Economy

New orders for manufactured durable goods increased (+3.2%) ^[2] in March to $276.4B, this follows a (-1.2%) decrease in February and a (-5.0%) decrease in January. Total durable goods orders are up (+3.3%) year over year. Much of the increase in the headline number is attributable to a (+78.4%) jump in new orders for passenger planes, this follows (-8.4%) and (-56.3%) readings for the previous 2 months. Orders for nondefense aircraft and parts increased (+10.4%), computers and electronics (+1.9%), and appliances (+0.8%), while automobile makers reported a slight drop (-0.1%) in new orders. Excluding the steep increase in orders for transportation equipment, “core” durable goods orders rose (+0.3%) and follows readings of (-0.3%) and (+0.4%) for the previous 2 months. New orders for capital goods increased (+8.7%) as nondefense orders increased (+10.4%). Excluding defense, new orders increased (+3.5%). Shipments of manufactured durable goods increased (+1.1%) to $277.0B and follows readings of (-0.8%), and (-0.4%) for the previous 2 months. Unfilled orders, up thirty of the last thirty-one months, increased (+0.4%) to $1,160B. Inventories decreased (-0.9%) to $488.8B and follows readings of (+0.1%), and (-0.2%) for the previous 2 months.

The Commerce Department’s first estimate on the first-quarter gross domestic product (GDP) growth reported the economy expanded at an annual rate of 1.1% ^[3]. The first estimate is well under the 2.6% growth in the fourth quarter. Primary contributors to the slowdown in growth were a decline in private inventory investment and a deceleration in nonresidential fixed investment. The inventory slowdown took 2.26 percentage points off the headline number. Business investment increased slightly (+0.7%) and followed a (+4.0%) reading in the prior quarter. Business investment added only 0.10 percentage points to the headline number. Consumer spending as measured by personal consumption expenditures was strong, increasing (+3.7%), up from (+1.0%), the previous quarter. Government consumption expenditures reported up (+4.7%) and added 0.81 percentage points to the headline number. The personal consumption expenditures price index, a closely watched measure of inflation by the Federal Reserve, increased (+4.2%), as compared to (+3.7%), (+4.3%), (+7.3%), and (+7.5%) over the previous four quarters. Core personal consumption expenditures, which strips out food and energy, increased 4.9%, as compared to (+4.4%), (+4.7%), (+4.7), and (+5.6%) over the four previous quarters.

The Personal Consumption Expenditures (PCE) price index increased 4.2% ^[4] from March 2022, as compared to readings of (+5.1%), (+5.4%), (+5.3%) and (+5.7%) over the previous months. This is the lowest level since May 2021. The PCE is watched closely by the Fed as it portends future inflation. On a monthly basis, the headline number showed a (+0.1%) increase, as compared to (+0.3%), (+0.6%), (+0.3%), and (+0.4%) over the previous months. Consumer spending was little changed in March as an increase in spending on services was offset by a decrease in spending on goods. Lower food and energy costs helped slow the pace of inflation as food prices decreased (-0.2%) and energy prices decreased (-3.7%). The closely watched core PCE index, which strips out the more volatile factors of food and energy continued to plateau with a year over year (+4.6%) increase, this follows readings of (+4.7%), (+4.7%), (+4.6%), and (+4.8%) over the previous months.

Upcoming Economic Reports:

Wednesday May 3 – Fed Interest Rate Decision

Friday May 5 – Unemployment Rate (April)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Loews (L)	BP (BP)	CVS Health (CVS)	Apple (AAPL)	Berkshire Hathaway (BRK.B)
Stryker (SYK)	Starbucks (SBUX)	Yum Brands (YUM)	Booking Holdings (BKNG)	Warner Bros. Discovery (WBD)