ECONOMIC ROUND-UP
My general economic thesis of a very slow recovery appears well intact this morning after worse than expected retail sales and housing starts. ICSC Goldman Sachs retail sales came in -0.3% vs an expected 0.5% gain. Housing starts were also disappointing this morning.
Unlike Lowes, Home Depot had nothing positive to say about the housing market:
“Our markets, and the consumer in general, remain under pressure,” said Frank Blake, chairman & CEO. “But we continue to make progress on improving our business as evidenced by stronger customer satisfaction ratings.
It’s surprising to see stocks positive on this news. Whether this is complacency or market strength has yet to be seen. Keeping things in perspective, the S&P 500 is up just 1.5% thru the first 5 months of the year. No doubt, an abysmal annualized return.
I wonder if things will continue to get better into Q2…If so then the DOW should hit at least 10500.
I understand CNBC spun the unexpected drop in housing starts as good news. While I agree that reducing the number of houses built will help with excess inventory, I would bet if the housing starts had come in higher than expected, CNBC would have also spun that as a positive. Plus, what does the drop in expected housing starts mean for future unemployment numbers? I would think either more layoffs, or at best, no rehires for the currently unemployed.