Markets were all down last week. The reason: China.
China came, China left… no deal. You almost expected to see Howie Mandel close the clear acrylic box at the end of the week. It started the previous Friday night (May 3rd) when a cable from China was received at the White House. China had made significant revisions to the reported 150-page trade agreement the two sides had hammered out over many months. In effect, China broke the deal. As Markets opened on Monday, expectations for a positive result (a trade deal with China) began disappearing. On Friday China’s Vice Premier was in Washington briefly for meetings. In the end both sides walked away from the table, but we were told the talks will continue. So will the new tariffs. Rarely do you see a bi-partisan political response in Washington, but for now there is on this one.
We got two important inflation numbers last week. The Producer Price Index (PPI), the wholesale index, saw the annual year-over-year number stay at +2.2%. The Consumer Price Index (CPI) saw the annual y-o-y number move from +1.9% up to +2.0%.
Mother’s Day sales were expected to come in at $25 billion this weekend. $840 million for greeting cards, $2.6 billion for flowers, $4.6 billion for special outings, and $5.2 billion for jewelry.
The focus of the week: Normally it would be the new retail sales number (which is coming out Wednesday morning). But the focus will still be the trade issue with China.
Earnings season is winding down. Some of the companies reporting: John Deere, Macy’s, and Ralph Lauren.
Indicator focus: March’s business inventories, April’s retail sales, April’s industrial production (Wed); April’s housing starts, Mays’ Philly Fed Index (Thu); and May’s consumer sentiment (Fri).
Have a great week.
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