U.S. retail sales jumped by 0.7% on rising income in March, according to the Commerce Department - the best performance in three months. In addition, February retail sales were revised upwards to a gain of 0.5%, also better than expected. Excluding auto sales, retail sales jumped an even better 0.8% in March; economists were predicting an overall gain of just 0.6%. MarketWatch cautioned that the gains were largely "due to higher prices, not higher volumes." Excluding gas pump sales, retail sales gained just 0.4%. In other economic news, the New York Federal Reserve Bank reported this morning that manufacturing activity in New York will rebound only slightly in April, to a reading of 3.8, up from 1.9 the previous month when it hit its lowest level in two years. Economists were expecting the index to rebound to 7.6.
Sources: Bloomberg, MarketWatch (i), (ii)
Commentary: PPI Rises 1% on Energy and Food Price Gains, Core PPI is Flat • U.S. Import Prices Rise Greater Than Expected 1.7%; Initial Claims Hit 8-Week High • Soft PPI, Empire State Index Readings Send Futures Lower
Stocks/ETFs to watch: S&P 500 Index (NYSEARCA:SPY), Diamonds Trust Series 1 ETF (NYSEARCA:DIA), iShares Lehman Aggregate Bond (NYSEARCA:AGG), Retail HOLDRS ETF (NYSEARCA:RTH), SPDR S&P Retail (NYSEARCA:XRT), PowerShares Dynamic Retail (NYSEARCA:PMR)
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