Dow sank 180, decliners over advancers 2-1 & NAZ retreated 56. The MLP index was fractionally lower to the 263s & the REIT index fell 2+ to the 335s. Junk bond funds were lower & Treasuries declined, taking the yield on the 10 year Treasury up to 3.06% (more below). Oil slid below 71 & gold dropped a very big 24 to 1293.
AMJ (Alerian MLP Index tracking fund)
US retail sales increased moderately in Apr as rising gasoline prices weighed on discretionary spending, but consumer spending appeared on track to accelerate after slowing sharply in Q1. The Commerce Dept said that retail sales rose 0.3% last month & data for Mar was revised up to show sales surging 0.8% instead of the previously reported 0.6% rise. Last month's increase was in line with expectations. Retail sales in Apr increased 4.7% from a year ago. Excluding automobiles, gasoline, building materials & food services, retail sales rose 0.4% after an upwardly revised 0.5% increase in Mar. These core retail sales correspond most closely with the consumer spending component of GDP. They were previously reported to have risen 0.4% in Mar. Consumer spending braked sharply in Q1, growing at its slowest pace in nearly 5 years, amid delays in processing tax refunds. Clean-up efforts in the wake of back-to-back hurricanes in late 2017 had pulled forward spending into Q1. A recent increase in gasoline prices, if sustained, could blunt the impact of lower income taxes on consumer spending. Gasoline prices rose almost 17¢ to $2.75 per gallon in Apr, the highest price since Jul 2015. Consumer spending, which accounts for more than 2/3 of US economic activity, grew at a pedestrian 1.1% annualized rate in Q1. The economy expanded at a 2.3% pace in Jan-Mar. In Apr, auto sales edged up 0.1% after accelerating 2.1% in Mar. Receipts at service stations jumped 0.8%, reflecting higher gasoline prices. With prices at the pump rising, sales at restaurants & bars fell 0.3%, the largest drop since Feb 2017. Americans also cut back on spending on hobbies. Receipts at sporting goods & hobby stores dipped 0.1% last month, matching the drop in Mar. Sales at furniture stores rose 0.8% after surging 1.4% in Mar. Receipts at electronics & appliance stores slipped 0.1% while sales at building material stores rose 0.4%. Receipts at clothing stores shot up 1.4%, the biggest increase since Mar 2017, while sales at online retailers increased 0.6%.
US retail sales increase moderately in April
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot delivers mixed 1Q results
Stocks were severely overbought with no retreat in more than a week. Selling had to be expected. Treasury yields have been depressed for years & further increases are coming. Meanwhile changing intl trade is another dark cloud for traders to worry about. Once again, the Dow failed crack thru 25K because the bulls have not made their case for higher stock prices.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 70.51 | -0.45 | -0.6% |
| GC=F | Gold | 1,292.00 | -26.20 | -2.0% |
Stocks opened lower, putting the
Dow’s winning streak at risk as a mixed earnings report from Home Depot
(HD) contributed to the Dow falling into negative territory. Investors
also digested the latest retail sales, which rose for their 2nd-straight month in Apr. The rise in retail sales lifted the
10-year Treasury yield above 3%, to its highest level since 2011.
This applied headwinds to equities. Other economic data included Empire State Manufacturing, which came in at 20.1 versus the estimate for 15.5. Stocks rose yesterday with the Dow notching gains
as investors digested signs of easing trade tensions between the US & China. The Dow extended its
winning streak to 8 days, climbing 68 (0.3%) to
24,899, the S&P 500 edged 2 points higher to 2730 & NAZ was up 8 (0.1%) at 7411. Health-care
stocks climbed 0.7%, the most in the S&P 500, after Pres Trump on Fri unveiled a raft of modest measures to curb high
drug prices that left the pharmaceutical industry relieved & buoyed
its stocks, Casino & gaming stocks surged following a
Supreme Court ruling that allows states to legalize sports betting. In
commodities, oil was higher, climbing back above $71 a barrel while
gold futures were down, taking a hit from the climbing yields.
Stocks lower, hit by rising Treasury yields
US retail sales increased moderately in Apr as rising gasoline prices weighed on discretionary spending, but consumer spending appeared on track to accelerate after slowing sharply in Q1. The Commerce Dept said that retail sales rose 0.3% last month & data for Mar was revised up to show sales surging 0.8% instead of the previously reported 0.6% rise. Last month's increase was in line with expectations. Retail sales in Apr increased 4.7% from a year ago. Excluding automobiles, gasoline, building materials & food services, retail sales rose 0.4% after an upwardly revised 0.5% increase in Mar. These core retail sales correspond most closely with the consumer spending component of GDP. They were previously reported to have risen 0.4% in Mar. Consumer spending braked sharply in Q1, growing at its slowest pace in nearly 5 years, amid delays in processing tax refunds. Clean-up efforts in the wake of back-to-back hurricanes in late 2017 had pulled forward spending into Q1. A recent increase in gasoline prices, if sustained, could blunt the impact of lower income taxes on consumer spending. Gasoline prices rose almost 17¢ to $2.75 per gallon in Apr, the highest price since Jul 2015. Consumer spending, which accounts for more than 2/3 of US economic activity, grew at a pedestrian 1.1% annualized rate in Q1. The economy expanded at a 2.3% pace in Jan-Mar. In Apr, auto sales edged up 0.1% after accelerating 2.1% in Mar. Receipts at service stations jumped 0.8%, reflecting higher gasoline prices. With prices at the pump rising, sales at restaurants & bars fell 0.3%, the largest drop since Feb 2017. Americans also cut back on spending on hobbies. Receipts at sporting goods & hobby stores dipped 0.1% last month, matching the drop in Mar. Sales at furniture stores rose 0.8% after surging 1.4% in Mar. Receipts at electronics & appliance stores slipped 0.1% while sales at building material stores rose 0.4%. Receipts at clothing stores shot up 1.4%, the biggest increase since Mar 2017, while sales at online retailers increased 0.6%.
US retail sales increase moderately in April
Dow component HD reported Q1 EPS of $2.08, beating the estimate of $2.05, but sales missed expectations due to a "slow start to the
spring selling season." Revenue was $24.9B, under the revenue estimate for $25.15B. Also, sales at
stores open at least a year, comparable store sales, rose 4.2% , missing expectations of 5.38%. "We
are pleased by the strength of our business despite a slow start to the
spring selling season," CEO Craig Menear said. "Outside of our seasonal business, we had solid results
in all markets and categories and are seeing strong momentum in all
lines of business during these first few weeks of May." The company, which reaffirmed its sales &
earnings outlook for the entire year on "a favorable housing and
macroeconomioc backdrop," expects its fiscal 2018 sales to grow by
approximately 6.7% & comparable store sales to be up
approximately 5%. In Q1 of 2017
HD reported EPS of $1.67 on revenue of $23.89B. Q4 EPS came in at $1.52 on revenue of $23.9B. The stock lost 2.99.
If you would like to learn more about HD,click on this link:club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot delivers mixed 1Q results
Stocks were severely overbought with no retreat in more than a week. Selling had to be expected. Treasury yields have been depressed for years & further increases are coming. Meanwhile changing intl trade is another dark cloud for traders to worry about. Once again, the Dow failed crack thru 25K because the bulls have not made their case for higher stock prices.
Dow Jones Industrials
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