Friday, May 28, 2021
A litany of new economic data awaits Friday’s pre-market, just ahead of the three-day Memorial Day weekend. Market futures are up, looking to close the week on a solidly positive note: the Dow is +170 points at this hour, the S&P 500 +15 and the Nasdaq +45. These numbers remained intact following these data summaries:
Personal Income for April dropped significantly: -13.1% month over month, after a downwardly revised March popped on the stimulus check bonanza, +20.9%. Expectations were for even a deeper fall, to -14%. Still, income numbers are coming out ahead when we average the two months together. The year 2021 has been uncommonly volatile on personal income; usually, these numbers tack a lot closer to breakeven. We’ll see if this volatility persists as the Great Reopening continues.
Consumer Spending matched expectations of +0.5% for the month of April, with pent-up demand meeting higher price points on many consumer goods. This followed the stimulus-enhanced +4.7% for March, which was upwardly revised from 4.2% originally reported. Again, what will interest investors most — not to mention the Fed — will be whether this pent-up demand cools in the face of even higher inflation, transitory though it may be.
April’s Core Inflation came in a tad hotter than expected — +0.7% versus +0.6% — following last month’s print of +0.4%. Year over year, this amounts to +3.1%, which, if we recall our core consumer prices reported earlier this month in the CPI, pretty much matches the +3.0%. The deflator was +0.6% on the month, +3.6% year over year. This is the highest read in 13 years.
Finally, we see Advance Trade in Goods for April pulling back a bit from the all-time low posted for March: -$85.2 billion versus -$90.6 billion reported a month ago. The overall trend — especially from the actions taken during the Great Recession, where much of this advance trade was paid down — is still lower; we may even have forgotten the blip we saw in early 2020 (pre-pandemic, but during the “trade war” with China) which brought us briefly to $60 billion.
As it’s a long weekend, we don’t expect a lot of trading volume today, relatively. But these metrics -- from today and throughout this past week -- will be put to work in determining the temperature of our current economy. In our holiday-shortened next week, we look forward to the all-important monthly jobs data, along with Manufacturing, Services and Productivity reads. We also will follow Capitol Hill for signs of an infrastructure bill possibly being signed into law soon.
Questions or comments about this article and/or its author? Click here>>
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Personal Income Off Stimulus High, Inflation as Expected
Friday, May 28, 2021
A litany of new economic data awaits Friday’s pre-market, just ahead of the three-day Memorial Day weekend. Market futures are up, looking to close the week on a solidly positive note: the Dow is +170 points at this hour, the S&P 500 +15 and the Nasdaq +45. These numbers remained intact following these data summaries:
Personal Income for April dropped significantly: -13.1% month over month, after a downwardly revised March popped on the stimulus check bonanza, +20.9%. Expectations were for even a deeper fall, to -14%. Still, income numbers are coming out ahead when we average the two months together. The year 2021 has been uncommonly volatile on personal income; usually, these numbers tack a lot closer to breakeven. We’ll see if this volatility persists as the Great Reopening continues.
Consumer Spending matched expectations of +0.5% for the month of April, with pent-up demand meeting higher price points on many consumer goods. This followed the stimulus-enhanced +4.7% for March, which was upwardly revised from 4.2% originally reported. Again, what will interest investors most — not to mention the Fed — will be whether this pent-up demand cools in the face of even higher inflation, transitory though it may be.
April’s Core Inflation came in a tad hotter than expected — +0.7% versus +0.6% — following last month’s print of +0.4%. Year over year, this amounts to +3.1%, which, if we recall our core consumer prices reported earlier this month in the CPI, pretty much matches the +3.0%. The deflator was +0.6% on the month, +3.6% year over year. This is the highest read in 13 years.
Finally, we see Advance Trade in Goods for April pulling back a bit from the all-time low posted for March: -$85.2 billion versus -$90.6 billion reported a month ago. The overall trend — especially from the actions taken during the Great Recession, where much of this advance trade was paid down — is still lower; we may even have forgotten the blip we saw in early 2020 (pre-pandemic, but during the “trade war” with China) which brought us briefly to $60 billion.
As it’s a long weekend, we don’t expect a lot of trading volume today, relatively. But these metrics -- from today and throughout this past week -- will be put to work in determining the temperature of our current economy. In our holiday-shortened next week, we look forward to the all-important monthly jobs data, along with Manufacturing, Services and Productivity reads. We also will follow Capitol Hill for signs of an infrastructure bill possibly being signed into law soon.
Questions or comments about this article and/or its author? Click here>>
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>