Retail sales were off again in February – the 0.6% decline reported by the Census Bureau was the third straight monthly retreat. Economists surveyed by Briefing.com anticipated an 0.4% advance. This severe winter may have prompted households to spend more on utilities and services than on retail purchases. Another closely watched indicator, the University of Michigan’s consumer sentiment index, showed a preliminary March reading of 91.2. That was 4.2 points under its final February reading and 4.1 points below the expectations of economists polled by the Wall Street Journal. Less optimism among lower-income households influenced the decline.1,2
PPI DEFIES EXPECTATIONS
Both the overall and core Producer Price Index retreated half a percent for February. Even with low fuel and energy costs, economists polled by Briefing.com still projected a 0.3% rise in the headline PPI and an 0.1% advance for the core PPI. In January, the headline PPI fell 0.8%.2
OIL DOWN 9.6% IN A WEEK
Worries about a supply glut sent light sweet crude lower on the NYMEX. It settled at just $44.84 Friday, yet there was a nice development for oil investors: the Energy Department announced it would be buying up to 5 million barrels for its Strategic Petroleum Reserve. That could ease anxieties about excess inventory.3
BIG SWINGS, NO ADVANCE
A rollercoaster week ended with 5-day losses for all three major U.S. indices. The Dow shed 0.60%, the Nasdaq 1.13% and the S&P 500 0.86%. That resulted in the following Friday settlements: Dow, 17,749.31; Nasdaq, 4,871.76; S&P, 2,053.40.4
THIS WEEK: Monday, the Federal Reserve reports on February industrial output and Eastman Kodak and Molycorp announce Q4 results. Tuesday sees the release of February figures on building permits and housing starts and earnings from Oracle, Burlington Stores, Adobe Systems, Pacific Sunwear and DSW. Wednesday brings the latest Fed policy statement and earnings from Cintas, FedEx, Jabil Circuit, Guess?, Tilly’s, Smart & Final, General Mills, Wet Seal and Williams-Sonoma. The Conference Board presents its February index of leading indicators on Thursday, accompanying a new initial jobless claims report and quarterly results from Lennar and Nike. Darden Restaurants, Tiffany and KB Home report earnings Friday.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||3/13 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.44%||0.49%||1.45%||1.82%|
Sources: online.wsj.com, bigcharts.com, treasury.gov – 3/13/155,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation
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1 – foxbusiness.com/economy-policy/2015/03/13/consumer-sentiment-falls-in-march/ [3/13/15]
2- briefing.com/investor/calendars/economic/2015/03/09-13 [3/13/15]
3 – marketwatch.com/story/energy-dept-plans-up-to-5-million-barrel-oil-purchase-2015-03-13 [3/13/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [3/13/15]
5 – markets.wsj.com/us [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F13%2F14&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F13%2F14&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F13%2F14&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F12%2F10&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F12%2F10&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F12%2F10&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F14%2F05&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F14%2F05&x=0&y=0 [3/13/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F14%2F05&x=0&y=0 [3/13/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/13/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/13/15]