U.S. retail sales for January increased

Posted: Monday, March 11, 2019 - 09:13 EDT

U.S. retail sales for January increased by 0.2% during the month beating expectations for a flat reading.   January saw a slight bounce back from the holiday season that witnessed December consumption declining by 1.6% to end the year.  December was originally reported at a decline of 1.2% but was revised lower to 1.6% in this data report.  The slower November and December retail sales data was driven mostly by declining gasoline prices as well as the government shutdown.  Spending at gasoline stations remained soft in January declining by 2% during the month even with gas prices creeping marginally higher.  Stripping out more volatile auto and gas, spending grew at a healthy pace of 1.2%.  Otherwise, the tone this morning is improving after the dismal jobs data out of the U.S. on Friday.  However, Brexit remains a key concern leading up to the March 29 deadline.  This morning, Brexit talks continue in Brussels with UK Prime Minister May debating whether she will present her plan to Parliament tomorrow.  May has delayed her bill as she is concerned that there will not be enough support to pass.  There is also speculation that the opposition party could call a non-confidence vote to take over Brexit negotiations.

Friday ended on a marginally negative tone given the global growth revisions by the OECD, along with concerns expressed by BOE Governor Carney.  The new issue calendar has also been active over the past two weeks, which has led to a slower pace of spread tightening to end the week.  This week, the new issue calendar is expected to be lighter given the March break week and new bank supply mostly completed for the quarter.  Flows on Friday remained skewed towards selling given the softer tone in the market, although sentiment this morning has shifted to a more constructive nature.  To end the day, spreads widened anywhere from 1-3bps.

Equity Markets:

  Index Level % Change QTD YTD Q3 2017 Q4 2017 Q1 2018 Q2 2019 Q3 2019 Q4 2019
S&P 500 2,743.07 -0.21% 9.87% 9.87% 4.48% 6.64%

-0.76%

3.43% 7.71% -13.52%
TSX

15,996.21

-0.38%

12.24%

12.24%

3.68% 4.44%

-4.52%

6.77% -0.56% -10.11%

Rates:

 

Today

% Change

QTD change

YTD change

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Canada 5 Year

1.65%

0.02% -0.24% -0.24% 1.75% 1.87% 1.97% 2.07% 2.34% 1.89%
Canada 10 Year 1.77% 0.00% -0.20% -0.20% 2.10% 2.05% 2.09% 2.17% 2.43% 1.97%
Canada 30 Year 2.06% -0.01% -0.13% -0.13% 2.47% 2.27% 2.23% 2.21% 2.42% 2.18%
30yr Generic Corporate A rated Spread 1.50% 0.00% 0.00% 0.00% 1.24% 1.21% 1.24% 1.28% 1.30% 1.50%
30yr All-in Corporate A rated Yield

3.56%

-0.01% -0.13% -0.13% 3.71% 3.48% 3.47% 3.45% 3.72% 3.68%
US 10 Year 2.65% 0.02% -0.04% -0.04% 2.33% 2.41% 2.74% 2.86% 3.06% 2.69%
CDX IG 62.687 -0.950                

The information contained herein is intended for advisors for general information only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. All opinions contained in the commentary and expressed by the portfolio manager are subject to change without notice and are provided in good faith without legal responsibility. All market data is sourced from Bloomberg.