Rover’s Weekly Market Brief — 5/12/2017

Economy

After a -0.1% drop in March, the April Producer Price Index ^[6] (PPI) for final demand rose by a stronger than expected +0.5%, bringing the Y/Y increase to +2.5%, which is the highest rate since February 2012. Core PPI, which strips out more volatile components for a look at broad based pricing, was up +0.7% M/M, and +2.1% Y/Y. While almost two-thirds of the PPI gain can be attributed to a +0.4% increase in services, energy costs also rebounded from a -2.9% March drop to a +0.8% gain in April.

Although consumer prices recovered from March’s -0.3% drop to a +0.2% M/M (+2.2% Y/Y) increase in April’s Consumer Price Index ^[7] (CPI) report, the increase lagged producer costs in the PPI report. Consumer costs for food (+0.2%), energy (+1.1%), tobacco (+4.2%) and rent (+0.3%) were up, and costs were down for physician’s services (-1.2%), airline fares (-0.6%), apparel (-0.3%), wireless phone services (-1.7%) and new and used vehicles (-0.2% and -0.5%). Excluding food and energy components, core CPI was up +0.1% M/M (+1.9% Y/Y).

Retail sales estimates for March were revised upwards from -0.2% to +0.1%, and April sales were up +0.4% in the Advance Retail Sales ^[8] report. Brick and mortar stores continued to trend downward with a -0.5% drop in April, bringing losses for the first 4 months of the year to -5.2%, with online sales rising by +1.4% and +10.7% for the same periods. April sales increased for building/garden supplies (+1.2%), electronics/appliances (+1.3%), and motor vehicles (+0.7%), and decreased for furniture (-0.5%), food (-0.3%), and clothing (-0.5%).

Upcoming Economic Reports:

Tuesday May 16 – Housing Starts

Tuesday May 16 – Industrial Production

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Nippon Telegraph (NTTYY) [9]	Home Depot (HD) [10]	Cisco (CSCO) [11]	Wal-Mart Stores (WMT) [12]	Deere (DE) [13]
Mitsubishi UFJ Financial (MTU) [14]	TJX Companies (TJX) [15]	Target (TGT) [16]	Salesforce.com (CRM) [17]	Foot Locker (FL) [18]