Market Commentary by Scott J. Brown, Ph.D., Chief Economist
Retail sales fell 0.2% in May, matching the consensus forecast, but not quite as expected, as auto dealership sales rose 0.8% instead of falling (as the unit sales reported by the automakers did, seasonally adjusted). Ex-autos, sales fell 0.4%, pushed down partly by lower gasoline prices. Sales of building materials fell 1.7%, following a 2.3% drop in April – yet, sales of building materials for the first five months of the year were up 11.1% vs. the same period in 2011. That’s not weak.
Overall retail sales were up 7.0% y/y for the first five months of the year. Hence, this appears to be a weather story – the same story we saw in nonfarm payrolls (stronger in January and February at the expense of slower numbers in March, April, and May. Note that the folks at the Fed are smart enough to figure this out.The PPI fell 1.0% in May, a larger drop than expected, with the core rate at 0.2%, matching expectations. The core index for intermediate goods fell 0.2% and the core index for crude materials fell 1.3% (following a 1.8% drop in April). Pipeline inflationary pressures are now negative, but not enough (we believe) for the Fed to undertake more accommodation.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Dollars per British Pound||1.553||1.639|
|Dollars per Euro||1.260||1.447|
|Japanese Yen per Dollar||79.310||80.520|
|Canadian Dollars per Dollar||1.025||0.968|
|Mexican Peso per Dollar||13.988||11.798|
|10-year municipal (TEY)||3.18||2.97|
Treasury Yield Curve – 6/15/2012
S&P Sector Performance (YTD) – 6/15/2012
|FOMC Policy Decision
Bernanke Press Briefing
|Independence Day (markets closed)|
|Employment Report (June)|
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Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business June 14th, 2012.