Consumer spending easing
July 19, 2023
–Retail Sales lower than expected except for Control Group. Headline was expected +0.5 but actual +0.2. Control expected +0.3 but actual +0.6
“The control group is all sales excluding receipts from auto dealers, building-materials retailers, gas stations, office supply stores, mobile homes and tobacco stores.”
Industrial Production was -0.5%….it has contracted 6 out of the last 7 months.
–Yields were little changed, a bit higher in front with 2s up 2.3 bps to 2.753% and tens down 0.5 bp to 3.79%. SFRZ3/Z4 calendar nearly unchanged at -148 (9468/9616). This one-year calendar remains the lowest on the strip, and forecasts 1.5% of easing next year.
–MSFT exploded by 4%, adding over $100b to market cap as it revealed monthly pricing for Copilot, an AI productivity enhancement. Or gimmick. Take your pick. Starwood defaulted on a $212m mortgage backed by an office tower in Atlanta, as stress in CRE continues to build.
–20yr auction today, wi was 4.08% at the time of futures settlements. August treasury options expire Friday.
