The Morning View: May 15, 2020

  • May 15, 2020

Senior Vice President / Portfolio Manager

Announced this morning, Retail Sales for April fell 16.4%, worse than expected and the lowest reading on record. Weakness occurred in clothing & accessories, furniture, and department stores, while food & beverage (grocery) stores were strong, a similar dynamic from the previous month. The Control Group, which excludes sales for food, autos, building materials, and gas stations, fell 15.3% in April, much worse than the 5.0% fall expected, as spending trailed off following individuals “front-loading” purchases of items at the start of the COVID-19 pandemic. Overall, other than spending at grocery stores and some building materials dealers, retail sales were weak across the board. However, Mastercard indicated credit card volumes improved in early May, per a press release yesterday. A smooth re-opening of the economy, giving consumers confidence to spend money and overcome health concerns, will be important in the months ahead. Meanwhile, the rhetoric between the U.S. and China appears to be heating up again, reminding investors of the tension from last year. In all, both bond yields and equity futures are lower this morning as we head into the market open and a day that includes option expiration for May.

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