Market drivers last week included second quarter earnings reports and a continuation of U.S. disinflation and economic soft landing themes. The S&P 500 and NASDAQ both marked 15-month highs, closing up marginally for the week. Bonds traded down slightly with interest rates rising in the belly of the curve (2y, 3y, 5y) while the 10yr yield remained largely unchanged at 3.84%. The USD (+1.16%) and commodities (+2.17%) both edged higher on the week with the energy complex leading the way.

• A look at equity market technicals shows we may be somewhat extended (overbought) in the short term, the longer-term trend remains constructive.

• Liz Ann Sonders posted a useful illustration highlighting the notable improvement in breadth (participation/leadership) we’ve seen since early June and Bianco Research followed that note with a similar observation through a market cap lens.

• Q2 earnings season, with 18% reporting, has a blended earnings decline of 9.0% and revenue of -0.3%. The street is still projecting recovering earnings growth in the second half with 3Q estimates of +0.1% and 4Q of +7.5%.

• We’ve seen some material USD weakness following the U.S. CPI report triggering debate as to what exactly this weakening USD may be signaling.

• Expectations of a U.S. recession have receded slightly with the soft core CPI report feeding a soft landing narrative backed by sustained consumption, a resilient labor market, and robust service sector activity. The counter argument, however, is supported by recessionary manufacturing conditions, restrictive monetary policy, weak LEIs, and a deeply inverted yield curve.

• An FT article highlighted positive trends in private debt with demand supported by the high costs of public issuance, fewer reporting obligations, loss of business/operational control, and less rigor surrounding related party transactions.

• Bloomberg noted home equity dry powder has increased 56% over the past three years; Black Knight estimates the magnitude at $28.7t ($9.3t accessible at 20%).

• A lackluster reopening trend and weak GDP report has China signaling potential stimulative measures including a currency peg adjustment, relaxed mortgage requirements, and potential rate cuts.

• A Bloomberg article last week highlighted a significant increase in bankruptcies reaching the highest levels since 2010 but the article sparked some intense debate on the BCA Research weekly research call.

• June headline Retail Sales came in below expectations (0.2% vs 0.5%) but ex-vehicles (0.2% vs 0.3%) and ex- vehicles & gas (0.3% vs 0.3%) readings were both more in line with consensus.

• The four week moving average of Initial Jobless Claims fell from a near-term high on June 24th of 256,750 to last week’s level of 237,500.
• Industrial Production in June was soft, well under forecasts (-0.5% vs 0.0%) as were the Manufacturing Output (-0.3% vs 0.0%) and Capacity Utilization (78.9% vs 79.5%) readings.
• July’s Housing Market Index came in right at the consensus forecast of 56 after rising 5 points to 55 in June.
• June Housing Starts (1.434M vs 1.48M) and Permits (1.440M vs 1.483M) both came in below forecasted
• levels but within the larger consensus range.
• June Existing Home Sales cooled slightly from May’s reading to 4.16M.

Markets followed up a holiday shortened week with a healthy rally across risk assets on the back of an abbreviated but favorable economic calendar and a ‘relative’ good start to second quarter earnings season. U.S. equity markets posted a nice rally, up 2.5%-3.5% across the cap spectrum while developed (+4.2%) and emerging (+4.1%) international rallied even more so, benefiting from a notably weakening USD (- 2.3%). Interest rates 2yrs and beyond pulled back a fair amount leaving the 10yr UST (-0.23%) back to 3.83% while commodity markets posted a relatively broad-based rally across energy, grains, and industrial metals.

• With a relatively narrow market driving the S&P 500 up 17% year to date and 23% off the October 2022 low, concerns are bubbling again regarding short term overbought conditions. However, we are seeing improving breadth and participation over the past few weeks.

• The 2Q earnings season began last week by weaving a silver lining on a red earnings number (blended – 7.1%) with strong beat rates (80%) and beat magnitudes (8.8%). Revenue is coming in at -0.4% with historically average beat rates (63%) and beat magnitudes (1.6%).

• MRB highlighted the ‘Implausible Trinity’ of central banks’ mission of providing liquidity enough to maintain relatively constructive sentiment, support risk asset prices, tighten monetary policy sufficient to achieve a 2% core inflation rate, and sustain global economic growth.

• Inflation dynamics, labor market, and ensuing Fed policy are key market variables at this time and an item of note was last week’s low CPI print not influencing July fed funds futures at all and in fact, the probability of a 25bps rate hike increased to 96%.

• Bianco Research is making a strong point that the CPI base effect from 2022 inflation readings suggests the July – December window will be much more challenging to maintain the same deflationary trends that what we’ve seen in the first half.

• While the inverted yield curve is suggestive of recession historically, the long end today is clearly influenced by the Fed’s 2.5% long-term equilibrium rate as well as QE.

• BCA Political Research estimate on government spending impact on 2024 GDP from the 2023 FRA and SCOTUS decision on student debt forgiveness to modify the fiscal drag from -0.12% to 0.49% in 2024.

• A healthy consumer thanks to a robust job market and well capitalized balance sheets (excess savings) have a significantly larger influence on U.S. GDP than government spending.

• A Stanford research paper on work from home trends estimated average commuter time savings of 72 minutes per day (2 weeks/yr) and a value to workers of approximately 8% of their salaries – suggesting employees would take a pay cut to maintain work from home privileges.

• Markets received more indications of China’s weak post-reopening recovery in the form of deflationary readings for CPI (0%) and PPI (-5.4%).

• June CPI declined further than expected on both headline (YOY 3%a vs 3.1%e) (MoM 0.2%a vs 0.3%e) and core (YOY 4.8%a vs 5%e) (MoM 0.2%a vs 0.3%e) readings.
• Consumer Sentiment improved by a larger than expected margin, registering 72.6 versus consensus estimate of 65.5.
• The June NFIB Small Business Optimism Index improved to 91 from an 89.4 reading in May, above consensus forecast of 89.8 and the forecast range of 89.0-90.3.

Overbought conditions, dampened sentiment, and continued hawkishness from global central bank officials combined to snap a five-week winning streak for the S&P 500 last week. Sticky inflation pressures and softening economic data added to a risk-off tone last week where extended global equity markets took a pause. The week saw the S&P 500 close down 1.4% while developed (-3.5%) and emerging (-4.5%) markets fell further. Interest rates didn’t move much either way but commodity markets softened on the dampening global growth sentiment where WTI closed the week back below $70. The risk-off tone translated to a bid for the USD which closed 0.65% stronger on the week.

• A pricey and top heavy S&P 500 which has rallied 23% since October has investors on edge but BCA issued a reminder that valuations aren’t a very reliable short to intermediate term market buy/sell indicator.

• Markets digested a slew of hawkish Fed speakers last week with a dot plot backdrop showing zero of 18 members projecting any rate cuts in 2023 and a median Fed Funds rate at the end of 2024 only slightly lower than year-end 2023 projections.

• Markets have been increasingly pricing in the more hawkish Fed narratives. As recently as May 3rd, year- end Fed Funds projections were 4%, they are now over 5%.

• The BoE hiked rates 50bps last week, more than markets expected (25bps), joining Canada and Australian central banks who have surprised markets on the hawkish side of the ledger.

• A contrarian note from Bianco Research projects the July CPI release will be the 2023 low, forcing the Fed very much in the higher for longer camp.

• If leading economic indicators and inverted yield curve were the only metrics you monitored, the supporting case for recession would be overwhelming with May’s LEI registering a 14th straight monthly decline and the duration and depth of yield curve inversion both in rare form.

• A research note from Pictet illustrates very clearly how the TINA regime is a thing of the past, at least for now, with earnings yields, corporate bond yields, and T-bill yields fully converged – something we haven’t seen in decades.

• • June’s flash U.S. PMI readings (C, M, S) of 53, 46.3, 54.1 reflected additional deterioration in the manufacturing sector but surprised on the upside across the service sectors.

  • June’s flash non-U.S. PMIS looked like U.S. readings with manufacturing readings of Eurozone (43.6), UK (46.2), Japan (49.8), and Australia (48.6) alongside service sector readings of Eurozone (52.4), UK 53.7), Japan (54.2), and Australia (50.7).

  • The Housing Market Index in June continued to rebound to 55, surpassing both spot forecasts of 50 and consensus range of 48-52.

  • Housing Starts (1.631M) and Permits (1.491M) surpassed consensus estimates and registered above (starts) and at the high end (permits) of their respective forecasted ranges.

  • Existing Home Sales of 4.30M came in above the 4.25M consensus estimate and at the high end of the range. This release was 0.2% above prior month and -20.4% YOY.

• The FOMC met market expectations by ‘skipping’ June but made clear in the post-meeting press conference that future hikes are on the table. The ECB stepped down to a 25 bps hike following a path of two 75 bps and three consecutive 50 bps moves while the BOJ made no changes.

• U.S. inflation numbers eased slightly in May creating a little more breathing room for Fed officials to skip in June and wait on more data for the July decision which is now trading at a 60% probability for a 25 bps hike.

• Consumer surveys are adding to the disinflation narrative with UofM and NY Fed responses showing 1yr forward expectations falling materially while longer term expectations have remained relatively anchored under 3%.

• Yield curve slope indications for growth and monetary policy conditions have changed meaningfully. The 3m/10yr slope has ‘flattened’ from peak inversion of -1.89% to -1.57% while the 2yr/10yr has ‘deepened’ from -0.72% to near record inversion of -0.93%.

• The past couple weeks had seen breadth measures improve but still leaves the S&P 500 well into short-term overbought territory with 14-day RSI above 70, 2.37 standard deviations above the 200 dma, and 2.85 standard deviations above the 50 dma.

• The latest data on banks’ aggregate holdings indicate loan portfolios slightly above pre-SVB levels and deposit balances at March 22nd levels – following three straight weeks of outflows.

• With over 40% of banks reporting tightening lending standards, a BCA research study noted that on average, private credit outperformed private equity by 40%-50% over the following five years and by 10%-20% over the following 7rys with no adjustment for risk disparity in either case.

• The case for a stimulus response in China grew last week with property investment (-7.2% vs -6.7%), decelerating retail sales (12.7% vs 13.7%), industrial production decelerating from 5.6% to 3.5%, and new home prices falling 0.1% MoM.

• An OPEC report projecting 2023 oil demand at 2.3mbpd above 2022 levels served to boost oil prices and offset weak growth/recession price action early in the week. Some would argue that may be under appreciating potential demand destruction as we approach year end.

•  CPI inflation in May was generally in line but cooled versus April’s reading with headline and core readings of 4% and 5.3% respectively alongside MoM of 0.1% and 0.4%. Headline readings were slightly under consensus while core reads were spot on.

• Producer Prices (PPI) in May cooled more than forecasted with YoY headline (1.1% vs 1.6%), core (2.8% vs 2.9%), and super core (2.8% vs 3.3%) all below consensus. MoM numbers were also soft with headline (- 0.3% vs -0.1%), core (0.2% vs 0.2%), and super core (0.0% vs 0.1%).

• May’s NFIB Small Business Optimism Index of 89.4 was slightly better than consensus 88.4 and above the forecast range of 87.5 to 89.0.

• Retail Sales for May stayed healthy, beating the forecast (0.3% vs -0.1%) and landing at the high end of the range. Ex-vehicles (0.1% vs 0.1%) and ex-vehicles & gas (0.4% vs 0.2%) were both at and above estimates respectively.

• Industrial Production for May slipped -0.2%, below consensus estimate of 0.1% and at the low end of the forecast range.

• U of M Consumer Sentiment for June came in above consensus (63.9 vs 60.0) and the high end of the range of estimates (59.4 to 63.0).

• Weekly Jobless Claims again surpassed estimates (262k vs 248k) and the four-week average increased from 237.5k to 246.75k.

• A table this week from Bespoke reminds us of the old saying ‘be greedy when others are fearful and fearful when others are greedy’ illustrating returns following three recent reasons to be fearful (debt ceiling, SVB bank failure, Fed rate hiking cycle)
• Thankfully, the debt ceiling was suspended for a sixth time last week in a last minute budget negotiation compromise. Not thankfully, we have $30t in outstanding debt and zero political will on either side to address any actual material budget issues.
• Large caps record outperformance over small caps and U.S. outperformance over non-U.S. can be, at least partially, explained through an examination of sector weighting differences with growth stocks (NASDAQ) leading the way and more prevalent in U.S. markets.
• Economic reports last week took some pressure off the FOMC with respect to a June rate hike with unemployment edging higher and wage growth slightly below consensus. The June Fed Funds contract is now pricing a 76% “hold-steady” rate decision and 24% on a 25 bps hike.
• The combination of a slowing economy and substantially higher interest rates (debt service) has led to a notable increase in leveraged loan defaults.
• A BCA Commodity and Energy Strategy research note predicted China’s CCP will be announcing a new round of credit led policy stimulus shortly to address fledging economic growth.

• • The May Employment Report registered 339,000 jobs, well over consensus 190,000, but the unemployment rate rose to 3.7%. Participation Rate stayed at 62.6% while average hourly earnings were in line with consensus for both MoM (+0.3%) and YoY (4.3%).

  • The April JOLT Survey showed job openings increasing 3.67% to 10.10mm but down 14.05% from one year ago.

  • Eurozone headline and core inflation eased to 6.11% and 5.3% respectively, both cooling off from prior month readings.

  • The March Case-Shiller Home Price Index rose 0.42% from the prior month and +0.63% YoY.

A light economic calendar, the unofficial end to Q1 earnings season, ongoing debt ceiling negotiations, and ample FedSpeak were primary drivers behind the capital markets last week in what amounted to some risk-on price action. Equity markets posted solid gains on the week. The S&P 500 was up 1.65% marking a fresh YTD high (+9.2%) while developed (+0.71%) and emerging (+1.12%) markets weren’t far behind. Year to date global equity markets have returned 9.5% with developed international (+12.2%) offsetting the emerging markets (+2.9%) and U.S. markets in line. Rates jumped sharply higher across the curve last week, taking the 10 yr UST yield back up to 3.7% while both commodities and the USD edged higher.

• Charlie Bilello updated his CNBC “Markets in Turmoil” fail safe go long market signal, illustrating very clearly the “be greedy when others are fearful” rule of thumb. This S&P 500 rally does seem to be lacking breadth, despite marking a YTD high last week, and has been range bound.

• Much like Wall Street earnings forecasts, consensus economic forecasts too have been well below the mark as evidenced by the surging Bloomberg Economic Surprise Index.

• Alpine Macros’ look at the Fed Senior Loan Officer Opinion Survey illustrates a significant shift tighter in CRE lending standards along with a dramatic fall in loan demand.

• Fedspeak last week saw hawkish comments from Bullard, Logan, Barkin, Mester, Bostic, and Kashkari countered by a doveish but undecided Goolsby. Powell’s remarks Friday echoed past statements but market based expectations for a 25 bps hike in June did move briefly higher.

• A surprise hike this month by the BoA and an unexpected inflation acceleration in Canada serve to remind investors and global central banks that monetary policy (risks) remain.

• U.S. politicians are talking tough on the debt ceiling with mid-week signs of progress followed by a breakdown on Friday, putting talks on “pause.”

• The WMT earnings report marks the unofficial end to Q1 earnings season with blended earnings decline of – 2.2% and revenue growth of 4.1%. Forward earnings estimates for Q2 (-6.4%), Q3 (0.7%), and Q4 (8.1%) see recovery eventually but not until year end.

• A Goldman Sachs look at corporate debt shows a move higher in default rates but ample runway when accounting for generationally low coupons, excluding floating rate bank loans.

• The contrarian narrative from MRB to those in the recession camp includes, while inevitable eventually, the cost of capital is not yet at a breaking point for the U.S. economy and delevered private/consumer sectors and the relative importance of CRE vs RRE are tangible positives.

• NY Fed Household Debt and Credit Report showed credit growth slowing from 8.5% to 7.6% in Q1 with a deceleration in mortgages offsetting notable increases in credit card and HELOC debt while credit card delinquencies are beginning to turn higher.

• April Retail Sales were mixed versus forecasts with headline (0.4% vs 0.7%), ex-vehicles (0.4% vs 0.4%), and ex-vehicles & gas (0.7% vs 0.4%) but rebounded from the declines posted in March.

• April Industrial Production beat expectations (0.5% vs 0.0%) as did the reading on Manufacturing Output (1.0% vs 0.1%).

• The Empire State Manufacturing Index fell from 10.8 to -31.8 in May, the second largest monthly drop on record, albeit a notoriously volatile index over recent months.

• The Housing Market Index in May registered 50, ahead of the spot forecast of 45 and the consensus range of 43-46. Starts of 1.401M and Permits of 1.416M were both within consensus range. Existing Home Sales declined 3.3% MoM to 4.28M.

• Initial unemployment claims of 242k was improved over the prior month jump higher to 264k.

Markets last week continued to wrestle with banking sector weakness, the debt ceiling stalemate, and a mixed bag of economic data points. The S&P 500 closed the week down 0.29%, outperforming developed (-1%) and emerging (-2.13%) markets, leaving global equity markets up 8% YTD. Bond yields edged slightly higher with the 10yr UST closing at 3.46% while the USD clawed back a good percentage of its YTD losses, up 1.45% for the week. WTI drifted back down to the $70 support level again, joining industrial metals in taking the overall commodity complex lower on the week.

• Bank balance sheet stress, declining deposits, FDIC seizures, curtailed lending activity, and commercial real estate exposure amount to significant uncertainty surrounding policy, consumer/business confidence, and the overall economic outlook.

• Key banking system monitoring points are deposit outflows and loan/lease growth alongside credit spreads and bond market receptiveness to new issuance.

• The latest IMF Global Financial Stability Report highlighted the stark difference between U.S. and European bank stresses in terms of bond market-oriented balance sheet losses with exposure nearly 2x higher in the U.S. and losses as percentage of Tier 1 capital nearly 5x higher.

• BCA U.S. Political Strategists are assigning a 10% probability of a technical default on U.S. debt thanks to historically high political polarization which may introduce greater risks if the economy proves resilient. Regardless of default, the investment implication is clearly negative.

• MRB is maintaining a contrarian stance on recession highlighting a stabilizing housing market, the poor track record of a contractionary ISM Manufacturing Index, the manufacturing weighted and narrow variable LEI, and resilient unemployment despite the uptick in claims.

• While non-U.S. equities are up 18% in USD terms since the mid-October bottom, momentum has slowed materially over the past two months, defensive sectors have been outpacing the cyclicals, and higher beta geographies have underperformed the U.S.

• Economic data out of China including a sharp decline in aggregate financing and new loan issuance alongside weak PMI and trade data have supported the view of what looks like a lopsided and tempered recovery.

• The BoE met expectations by delivering a 12th consecutive rate increase, hiking rates by 0.25% to 4.5%.

• April’s headline and core CPI readings slowed as expected with headline and core readings of 4.9% and 5.5% respectively. MOM registered 0.4% for both headline and core, as forecasted.

• April’s headline and core PPI also slowed relative to prior month levels and came in below consensus on both headline (2.3% vs 2.5%) and core (3.2% vs 3.3%) readings.
• Initial jobless claims of 264k were well above the 245k consensus and the estimated range of 240k-250k, taking the four-week moving average to 245.5k. Claims are now 82k above the 1yr low in September of 2022.
• May’s U of M Consumer Sentiment survey fell sharply to 57.7, well short of consensus forecast for 63.0 and the prior month reading of 63.5.
• April’s NFIB Small Business Optimism Index deteriorated slightly to 89.0, just below the 89.7 spot consensus and at the low end of the forecast range (89.0-90.0).

Last week was relatively quiet as markets weighed a modest amount of economic data and digested the second week of the first quarter’s earnings reports. With big tech earnings and PCE inflation data on deck, markets may have been looking ahead. Equity markets have stalled out around the February highs with U.S. and developed non-U.S. markets pretty flat last week, now sitting up 8% and 12% respectively on the year. Bonds were weaker with interest rates moving slightly higher across the curve leaving the 10yr UST at 3.57% and both 3m/10yr and 2yr/10yr slopes still meaningfully inverted. Commodities traded lower with oil’s 5.6% decline taking WTI crude oil back below $80 and the USD appreciated 0.27% to bring its YTD loss down to -1.64%.

• First quarter earnings season update has a 76% beat rate and 5.8% beat margin with blended earnings of -6.2%. Top line revenue is seeing a 63% beat rate and a 1.8% beat margin with blended revenue of 2.1%.
• Second quarter earnings are forecasted to decline 5% by Q3 and Q4 are projected at +1.6% and +8.5% respectively for a full calendar year 2023 growth of +0.8%.
• Markets have quickly reversed rate pause and cut forecasts for later this year, now pricing an 89% likelihood of a 25bps hike on May 3rd. The 3-month T-bill hit 5.20% last week, its highest since 2001, and the forward curve (terminal rates) is now much closer to formal Fed projections.
• Bloomberg noted the BoA Merrill fund manager survey registered its most bearish reading since the GFC with a high cash allocation, a net 10% overweight to bonds, and a healthy 63% of respondents expecting a weaker economy.
• 3.5% of ECB rate hikes, tightening bank lending standards, and elevated inflation have the ZEW Survey of German investor sentiment looking low and deteriorating, similar to the U.S.
• In forecasting lower fuel prices, RBC Capital Markets noted global refining capacity is set to increase by 1.5mbpd in 2023 and 2.4mbpd in 2024, the largest two-year increase in 45 years.
• The U.S. tax deadline hit us all last week, a time when bank deposits typically drop by approximately $250b to pay the invoice. Weaker than expected tax collections of $108b on tax day last week may have pulled the debt ceiling debate into June.
• Bank deposit flight has slowed to a trickle but the expectation is that deposits will continue to leave the banking system until the gap between deposit rates and money fund rates closes.
• Bloomberg reported weekly loan volume (+$61b) and deposits (+$10b) with the 2023 deposit buildup to tax deadline obviously looking very different from prior years.
• With the exception of Japan and Australia, consensus 2023 growth is higher now than at the beginning of the year in every major economy. China reported YOY Q1 GDP of 4.5%, up from Q4’s 2.9% pace.

• U.S. March PMI data (C, M, S) registered 53.5, 50.4, 53.7 showing improvements on both manufacturing and services fronts.

• E.U. and U.K. March PMI data (C, M, S) registered (54.4, 45.5, 56.6) and (53.9, 46.6, 54.9) respectively.

• The April NY Fed Services Activity report showed healthy levels of business activity and clearcut disinflation trends but the overall business climate deteriorating to 2012 levels.

• April’s Housing Market Index registered 45, in line with consensus and a 1 point improvement over the March reading.

• March Housing Starts (1.420mm) and Permits (1.413mm) came in within consensus range after both readings jumped sharply higher in February.

• Existing Home Sales of 4.444mm in March were slightly under consensus estimate of 4.5mm.

Markets last week digested a highly anticipated beginning of Q1 earnings season, ample inflation data, and a look at the March FOMC meeting minutes along with a healthy dose of Fed speaking engagements. Risk markets breathed a sigh of relief generally speaking with encouraging reports from the banking sector and continued evidence of decelerating inflation pressures. The relief rally continued in global equity markets which were up 1% to 1.75% led by the cyclicals. Interest rates shifted higher on the week in a relatively parallel fashion leaving 10yr and 2yr yields at 3.52% and 4.08% respectively. Commodity markets were broadly higher with both oil and industrial metals catching a bid while the USD traded approximately 0.25% weaker, leaving it down 2% on the year.

• Earnings kicked off this week with a closely monitored initial burst of reports from the banking sector where money center banks outperformed on better than feared results while regionals struggled. Some strategists see more downside for earnings with a softening macro backdrop and persistent wage pressures.

• A very important consequence of declining bank deposits and more comprehensively, M2, is that banks create less new money by making loans and buying securities. Fewer deposits and tightening credit standards translate to less lending which is a prominent risk going forward.

• Fedspeak last week continued to reiterate a more hawkish tone than markets are expecting with markets currently pricing in nearly 200 bps in cuts over the next 18 months, beginning in June.

• Notable FOMC minutes anecdotes included ‘several participants’ advocating for a pause in March, banking sector turmoil would likely result in a mild recession later in 2023, and tangible concern about credit creation and bank lending.

• Last week’s friendly CPI report and very soft PPI report were offset somewhat by rising consumer inflation expectations seen in both UofM and NY Fed survey results, likely contributing to an upward move in May FOMC rate hike probabilities (25bps) to 78%.

• Data from S&P Global illustrate a worrying trend of increasing bankruptcy filings in the first three months of 2023.

• Wage growth data also fed the hawkish Fed narrative last week with Atlanta Fed Wage Growth Tracker accelerating from 6.1% to 6.4%.

• March headline and core CPI measured 5.0% and 5.6% YOY with 0.10% and 0.40% MOM readings. The March headline and core PPI measured 2.7% and 3.4% YOY with -0.5% and -0.1% MOM readings.

• March Retail Sales came in below expectations (-1.0% vs -0.4%) with readings on Ex-Vehicles (-0.8% vs -0.4%) and Ex- Vehicles & Gas of -0.3%.

• Industrial Production in March registered 0.4% versus 0.3% forecast with readings on Manufacturing Production (-0.5% vs -0.1%) and Capacity Utilization (79.8% vs 78.8%).

• April’s U of M Consumer Sentiment Survey registered 63.5 versus consensus forecast of 62.7.

• The March NFIB Small Business Optimism Index ticked slightly higher to 90.1, just above the consensus estimate of 89.0.