What’s the Story?

by CC April 16, 2012 9:25 am • Commentary


Equity futures advanced as retail sales gained 0.8 percent in March, almost three times as large as projected and followed a 1 percent advance in February, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for a 0.3 percent rise.

A separate report showed manufacturing in the New York region expanded in April at the slowest pace in five months, a sign the boost to the U.S. expansion from factories may be moderating. Spain is scheduled to sell bonds tomorrow and on April 19 as the cost of insuring its debt against default reached a record.


Retail sales rose more than expected in March as Americans shrugged off high gasoline prices and bought a range of goods, suggesting that economic growth in the first quarter did not slow as much as many had feared.

Total retail sales increased 0.8 percent, the Commerce Department said on Monday, after a slightly downwardly revised 1.0 percent rise in February that was previously reported as a 1.1 percent advance.

Last month’s gains, which surpassed economists’ expectations for only a 0.3 percent rise, could prompt analysts to raise their first-quarter growth forecasts from an annual pace of around 2.5 percent currently.

The economy grew at a 3.0 percent rate in the fourth quarter.

The rise in sales last month was broad-based, even though Americans paid 27 cents more per gallon of gasoline than they did the prior month.


Equities are looking relatively decent this morning. U.S. stock futures are modestly higher, and Europe stocks are higher as well. But they’re swimming upstream.

Asian stocks are in the red. Crude-oil futures are down about 0.3%. Gold is down, silver is down. Copper, corn, cotton and other “softs” are down. The euro is down, about 0.3%.

The key U.S. 10-year Treasury yield is down, back under the 2% mark, lately at 1.98%. Germany bond yields are down, and Spain’s are up. The yield on the Spanish 10-year bond has climbed back above 6%, at 6.04%. Italy’s 10-year has crept up to 5.56%.