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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (13783)	5/13/1999 11:57:00 PM
From: Les H	Respond to of 99985

Favorable Data Helps Bonds Better than expected data on retail sales is helping push bond prices higher this morning. Thirty-year bonds are up 24/32, yield 5.77%. Two-year notes are up 2/32, yield 5.13%. Retail sales in April rose .1%, ex-autos up .4%. Expectations were for a rise of .3% and .5%, respectively. Retail sales for March was revised from .2% to .1%. This is the first downward revision to retail sales in six months. Excluding gasoline sales, retail sales fell .1%. Auto sales fell .8%. General merchandise sales fell .4%, its first drop since last July. Although one month of data does not make a trend, the bond market is hoping this is the beginning of the long awaited consumer slowdown. PPI for April rose .5%. The core rate (ex food and energy) rose .1%. This matched expectations. Year/year, PPI is up 1.1% vs. .8% the previous month. Energy prices rose 5.1%, its largest increase since the Persian Gulf war. Food prices fell .9% and computer prices fell 2.9%. Intermediate prices (goods in the intermediate stages of production) rose .6%. Core prices (goods in the first stages of production) rose 1.3%. Prices remain well behaved except for energy. The gain in PPI mostly reflects a 54% rise in crude oil since mid-February. Bonds are relieved the price rises are not more broad based. Initial jobless claims were unchanged at 303,000. Expectations were for a small decline. Same story here, tight labor markets. Bonds did not react to the data. The dollar is strong this morning on the belief that Treasury Secretary designate Lawrence Summers will maintain Robert Rubin's strong dollar policy. After initial concern over the resignation of Rubin, the markets now feel that Summers will be a strong replacement. Indeed, it is believed that Rubin' s departure signifies the end to the world's financial crisis, a strong positive. Today's speakers include Treasury Secretary Rubin, Federal Reserve Vice-chairman Rivlin and Minnesota Fed President Stern. Friday will bring data on CPI, industrial production, capacity utilization, business inventories and the University of Michigan consumer confidence Index. bonds-online.com Bonehead Legal Ruling on Microsoft Temps news.com