U.S. retail sales for May came in at 0.5%

Posted: Friday, June 14, 2019 - 09:27 EDT

U.S. retail sales for May came in at 0.5%, missing expectations for an increase of 0.6% in the month. However, the previous month was revised higher from -0.2% to 0.3%. In May, consumption was broad based rising in 11 of the 13 sectors. Sporting goods and electronics both rose by 1.1% with electronic sales increasing after three straight months of declines. Motor vehicles sales also rebounded from the previous month while gas stations showed an expansion despite declining fuel prices. Online sales also displayed a surge rising the most since January. Excluding auto and gas sales, the month of May also showed retail sales increase by 0.5%. The data release this morning is providing support given the risk-off tone. The recent U.S. and Iran escalation is causing concerns that a larger confrontation may ensue. Despite the strong day for crude prices yesterday as a result of the oil tanker attacks, oil prices are tracking lower this morning.

Attention this morning may be diverted towards the Toronto Raptors after winning the NBA championship last night. Yesterday, in the Canadian corporate credit market, the new issue market remained active with Laurentian Bank pricing a $300mil 3-year deposit note at +120bps over the curve. However, there continues to be substantial chatter around additional ABS issuance going forward.  GM Financial announced a $450mil five tranche deal yesterday while CNH Capital is also expected to launch a $415mil equipment receivables deal. Last off, RBC plans to price its real estate CMBS REAL-T deal sometime next week. Given the reduced new issuance supply yesterday, it gave a chance for credit spreads to stabilize. Overall spreads ended yesterday mostly unchanged.

Equity Markets:

  Index Level % Change QTD YTD Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
S&P 500 2,891.64 0.41% 2.47% 16.46% 6.64% -0.76%

3.43%

7.71% -13.52% 13.65%
TSX

16,239.26

0.07%

1.48%

14.98%

4.44% -4.52%

6.77%

-0.56% -10.11% 13.29%

Rates:

 

Today

% Change

QTD change

YTD change

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Canada 5 Year

1.35%

-0.05% -0.17% -0.54% 1.87% 1.97% 2.07% 2.34% 1.89% 1.52%
Canada 10 Year 1.46% -0.04%

-0.16%

-0.51% 2.05% 2.09% 2.17% 2.43% 1.97% 1.62%
Canada 30 Year 1.72% -0.03% -0.17% -0.46% 2.27% 2.23% 2.21% 2.42% 2.18% 1.89%
30yr Generic Corporate A rated Spread 1.45% 0.00% -0.05% -0.05% 1.21% 1.24% 1.28% 1.30% 1.50% 1.50%
30yr All-in Corporate A rated Yield

3.17%

-0.03% -0.22% -0.22% 3.48% 3.47% 3.45% 3.72% 3.68% 3.39%
US 10 Year 2.06% -0.03% -0.35% -0.62% 2.41% 2.74% 2.86% 3.06% 2.69% 2.41%
CDX IG 61.639 1.271                

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.