Publications

U.S. Economic Indicators

The Conference Board’s Leading Economic Index (“LEI”) declined 7.5 points (6.7 percent) to 104.2 in March – the largest monthly decline in the series’ 60-year history. The sudden deterioration caused by the coronavirus pandemic was broad-based, with the largest negative contributions coming from unemployment claims and stock prices. Conference Board Report

U.S. News

According to the Wall Street Journal, a recent survey of large U.S. companies operating in China found that an economic decoupling between the two superpowers is viewed as more realistic now than before the coronavirus outbreak, with fewer than half of companies currently viewing decoupling as impossible, compared to two-thirds last October. While some companies were already concerned about excessive reliance on Chinese supply chains before the pandemic, the outbreak has reinforced the need to diversify due to both supply chain and political risks. WSJ

Bloomberg reports that Russia and Saudi Arabia have signaled openness to further production cuts after last week’s historic agreement failed to curb oil’s downward price spiral. Further action by OPEC+, however, is highly uncertain, especially given the contentiousness of last week’s negotiations and Saudi Arabia’s need to maintain a relatively high level of oil output to preserve associated gas production. Bloomberg

U.S. Economic Indicators

Privately-owned housing starts fell 22.3% in March to a seasonally adjusted annual rate of 1.22 million (up 1.4% year-over-year). Housing permits fell 6.8% to a 1.35 million annual pace in March (up 5.0% from last year). Census Bureau Report

Initial jobless claims fell 1,370,000 to 5,245,000 last week. The four-week moving average rose 1,240,750 to 5,508,500. DOL Report

U.S. News

According to Bloomberg, oil production cuts agreed to earlier this week by OPEC+ and other producer nations will not begin until May, meaning physical oversupply concerns will remain an issue for months ahead. In addition to being far from enough to offset the unprecedented drop in demand, the cuts are set to be implemented too late to prevent rapid filling of storage facilities. Bloomberg

U.S. Economic Indicators

Retail sales fell 8.7% in March and were down 6.2% from a year ago. Core sales — which exclude autos, gasoline, building materials, and food services —  increased 1.7%. Census Bureau Report

Industrial production declined 5.4% in March – the largest monthly decline since January 1946 – and is down 5.5% year-over-year. Capacity utilization fell 4.3 points to 72.7. Fed Report

Business inventories edged down 0.4% in February and were down 0.1% from February of last year. Manufacturers’ sales declined 0.2% in February and were up 1.3% compared to a year ago. Census Bureau Report

The Empire State Manufacturing Survey indicates that business activity plunged in April as the headline index fell 56.7 points to -78.2. The new orders index fell 57.0 points to -66.3, the shipments index fell 66.4 points to -68.1; and the index for number of employees fell 53.8 points to -55.3; meanwhile the delivery time index increased 8.8 points to 11.0. NY Fed Report

The NAHB Housing Market Index plunged 42 points to 30 in April , the largest single monthly decline in the history of the series and the lowest level since June 2012. NAHB notes that builders are facing notable supply chain gaps and ongoing confusion about eligibility for the Paycheck Protection Program. NAHB Report

U.S. News

The Financial Times reports that junk-rated U.S. companies raised more than $2 billion in debt on Monday, indicating that recent Fed actions to prop up the high-yield market are succeeding. The Fed’s decision to purchase exchange traded funds that buy high-yield debt sparked the largest rally in junk bonds in over ten years – a welcome development for lesser-known and lower-rated companies strapped for cash. FT

According to the Washington Post, a recent survey of local officials shows that over 2,100 U.S. cities – representing 93 million people nationwide – are anticipating major budget shortfalls this year due to the coronavirus pandemic. The $2 trillion dollar rescue package passed in March provides some funding to help local governments with responding to the pandemic, but the funds cannot be used to close the general revenue gaps caused by the sudden economic downturn. WaPo

U.S. News

The Wall Street Journal reports that a coalition of global oil producers led by Saudi Arabia, Russia, and the U.S. successfully agreed to cut oil production by a combined 9.7 million barrels a day – over 13% of world production – to address the oversupply caused by the coronavirus-induced fall in demand. However, with oil consumption expected to decline by as much as 30 million barrels a day on account of the virus, many analysts believe the agreement is too little, too late. WSJ

According to the Financial Times, many American and European importers are in the unusual position of trying to intentionally slow down shipments from overseas to avoid having to pay rising warehousing and transport fees. After rushing to frontload imports as Chinese factories shut down earlier this year, businesses have reversed course as economic activity in advanced economies ground to a halt, and are now seeking to use containers as floating storage devices to offset high inventory costs. FT