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Afternoon Note

GDP Death Spiral

By Charles Payne, CEO & Principal Analyst
5/15/2018 1:24 PM
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The wheel of concern has returned to the ten year yield once again.  The yield, now at 3.06%, is breaking the long-term trend that has been in place for years.  This had to happen, and it’s happening largely for the right reasons - an improving economy.  There isn’t the panic seen when the yield initially began testing 3.0% on the upside, but its bringing back all the conversations about the tug of war between stocks and bonds.

Economic Data

Lots of economic data was released today, which combined, point to an expanding economy.  The Empire State Federal Reserve report came in better than expected.

Perhaps, the best part of the report is six-month expectations, which rebounded to 31.1 from 18.3 (see arrow) after a massive decline in April.

 

Home Builder Confidence

NAHB came in better than expected as traffic of prospective buyers came in at 51 continuing its longest string on monthly expansion (seven months) since 2005.   On the other hand, lumber prices continue to surge, and that has the industry as worried as mortgage rates, which are also edging higher.

Chart

Retail Sales

An interesting aspect of the retail sales report is continued strength in clothing, which continues to perform strongly and belie the notion consumers are tapped out.  The result has the S&P Retail ETF moving up on an otherwise down session.  

 


Comments
What about Credit Card debt? Is it going up?

William Brown on 5/15/2018 2:51:49 PM
Guess you missed my report last week credit card debt actually declined two months in a row. I think consumers, while confident, are smarter (euphemism for scared) about getting too extended. CP

Charles Payne on 5/15/2018 3:04:07 PM
 

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