May 15, 2019
Retail Sales for the month of April were released earlier today and came in weaker than expected across the board. If there was a bright spot in the report it was that March’s report was revised higher. Of the fourteen sectors that comprise total sales, seven saw declines, one was unchanged, and five saw m/m growth. In the chart below, we show the number of consecutive months that each sector has shown growth or declines. While more sectors saw m/m declines in sales growth than gains in April, none of them have seen back to back declines. On the positive side, Bars & Restaurants (where millennials tend to spend) has seen sales growth for four straight months, while Gas Stations is rising a streak of three straight months of gains. Given the fact that prices at the pump just recently came off of a record streak without declines, that shouldn’t come as too much of a surprise either.
We just published our monthly update to key trends in this month’s Retail Sales report. To see the report, sign up for a monthly Bespoke Premium membership now!
May 2, 2019
Heading into Friday’s Non Farm Payrolls (NFP) report for April, economists are expecting an increase in payrolls of 190K, which would be a modest decline from March’s slightly stronger than expected reading. In the private sector, economists are expecting an increase of 185K, which is slightly better than the last month’s reading of 182K. The unemployment rate is expected to remain unchanged at 3.8%. Average hourly earnings are expected to grow at a rate of 0.3% versus the surprisingly low 0.1% reading last month. Finally, average weekly hours are expected to be unchanged at 34.5.
Last month’s solid report was the first time this year that the monthly change in NFP was within 100K of the estimate, so hopefully now that the kinks from the shutdown are behind us, we will see a return to the trend of reported results being in the ballpark of expectations.
Ahead of the report, we just published our eleven-page preview of the April jobs report. This report contains a ton of analysis related to how the equity market has historically reacted to the monthly jobs report, as well as how secondary employment-related indicators we track looked in April. We also include a breakdown of how the initial reading for April typically comes in relative to expectations and how that ranks versus other months.
One topic we cover in each month’s report is the S&P 500 stocks that do best and worst from the open to close on the day of the employment report based on whether or not the report comes in stronger or weaker than expected. In other words, which stocks should you buy, and which should you avoid? The table below highlights the best-performing stocks in the S&P 500 from the open to close on days when the Non-Farm Payrolls report has been better than expected over the last two years.
Of the top performing stocks on days when NFP beats expectations, eight sectors are represented, but Consumer Discretionary and Energy lead the way with seven each. Mattel (MAT) and Vornado (VNO) have been the two best-performing stocks with average open to close gains of over 2%, while Western Digital (WDC) and Cognizant (CTSH) have been the most consistent to the upside with positive returns 85% of the time.
For anyone with more than a passing interest in how equities are impacted by economic data, this April employment report preview is a must-read. To see the report, sign up for a monthly Bespoke Premium membership now!
