Rover’s Weekly Market Brief —8/17/2018

Economy

Retail sales ^[6], adjusted for seasonal variations but not price changes, were up +0.5% in July, with June’s sales revised downward from +0.5% to +0.2%, and sales increasing +6.4% over the previous 12 months. Compared to the previous month, sales increased the most for restaurants (+1.3%), clothing stores (+1.3%), and department stores (+1.2%), and dropped for hobby stores (-1.7%), furniture stores (-0.5%), and health and personal care stores (-0.4%). On a yearly basis sales decreased only for hobby stores (-4.9%), and increased the most for gasoline stations (+22.2%), restaurants (+9.7%), nonstore (e.g. online) retailers (+8.7%), and clothing stores (+6.4%).

Decreases in mining (-0.3%) and utilities (-0.5%) offset a +0.3% increase in manufacturing to bring industrial production ^[7] to a +0.1% increase in July, with June’s increase revised upwards from +0.6% to +1.0%. Production increases over the previous 5 months averaged +0.5%, with estimates ranging from a revised +1.2% in April to -0.5% in May, and the rate over the previous 12 months was +4.2%. Within manufacturing, durable goods production was up +0.4%, with increases for computer and electronics products (+1.3%) and motor vehicles (+0.9%), and -0.2% drops each for furniture and miscellaneous goods. Capacity utilization remained steady in July at 78.1%, after a +0.1% upward revision to June, but remains -1.7% below the 1972-2107 average.

Housing starts ^[8] rose slightly to a seasonally adjusted annual rate of 1.168 million in July, with June’s starts revised downward to 1.158 million (-15,000), echoing concerns cited in the National Association of Home Builders Housing Market Index ^[9] about increasing costs, labor shortages and a lack of buildable lots. In the Northeast, -4.0% (-18.5% Y/Y) fewer units were started, but the number of completed units rose by +65.8% (+18.9% Y/Y), with single family homes only comprising +2.1% of the increase. In the Midwest, housing starts increased by +11.6% (+7.5% Y/Y), and completions rose by +7.6%, with an 11% jump in single family home completions. In the South, construction starts increased +10.4% (+4.1% Y/Y), but completions fell -6.0%, while in the West both construction starts (-19.6%, -10.9% Y/Y) and completed units (-13.3%, +11.8% Y/Y) fell.

Upcoming Economic Reports:

Wednesday August 22 – Federal Open Market Committee August Meeting Minutes

Friday August 24 – Durable Goods Orders

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
The Estee Lauder Cos (EL) [10]	Medtronic (MDT) [11]	Royal Bank of Canada (RY) [12]	Alibaba Group Holdings (BABA) [13]	AAC Technologies Holdings (AACAY) [14]
Sasol (SSL) [15]	TJX Companies (TJX) [16]	Lowe’s Companies (LOW) [17]	VMware (VMW) [18]	Foot Locker (FL) [19]