The morning's economic data has hit the tape, with pre-market futures lower despite being lower before the reports came out. The Dow is currently giving back -180 points of its gains made yesterday, while the S&P 500 is down -20 points and the Nasdaq is down -90 points. Bond yields are slightly lower, with the 10-year yield at +4.41%, the 2-year at +3.94%, and the 30-year yield at +4.92%.
Retail Sales for May disappointed, with a headline print of -0.9%, the lowest since January and below the consensus of -0.6%. Auto Parts fell -3.5% for May, followed by -2.7% in Building Materials. However, Sporting Goods grew +1.3% and Furniture +1.2%. Excluding big-ticket auto sales, the number ebbs to -0.3%, still worse than the +0.1% analysts were expecting. The Control number, which is a key inflation metric, was the sole bright spot here, with a +0.4% increase from April's downwardly revised -0.1%.
It's important to note that the retail sector is reflecting the tariff realities in the U.S., with headline month-over-month Retail Sales blossoming up +1.7% in anticipation of complications regarding tariffs President Trump had been promising. This "pull-forward" effect is evident in the May numbers, and over time, we'll be able to see more clearly how retailers are able to successfully price goods.
Imports and Exports also saw a decline last month. Import Prices were unchanged for May at 0.0%, versus expectations of -0.1%, but down from April's unrevised +0.1%. Ex-fuel costs, the number is +0.2%, half what was posted a month ago. Export Prices sank -0.9% last month, the worst print in over two years, with U.S. exports year over year at +1.7%, the lightest read of the year and 80 bps lower than the previous year's figure of +2%.
