Economic & Earnings Commentary

Sure’n begorrah — we start a new trading week on the stock market with futures trying to notch higher. They’ve improved on the release of new economic data an hour before the opening bell. The Dow is still down: -47 points, but better than the -115 earlier in the pre-session. The S&P 500 has swung from -5 points to +8, with the tech-heavy Nasdaq emerging from flat to +64 points at this hour.

Retail Sales Weaker on Headline, Sturdy Underneath

The February print for U.S. Retail Sales came in well short of expectations on headline: +0.2% versus +0.6%, and off a downwardly revised -1.2% for January, which is the weakest month reported since November of 2022. Strip out auto sales, and we come in-line with estimates at +0.3%. The previous month was revised lower, from -0.4% to -0.6%.

Continuing in this vein, removing autos and gasoline sales actually resulted in a better-than-expected print: +0.5% versus +0.4% anticipated, with the January number ratcheting down on revision from -0.5% to -0.8%, the lowest figure there since March of 2023. The Control number, which economic reports feed into other monthly data at the Fed and elsewhere, swung to +1.0% from +0.4% expected, and from a downwardly revised -1.0% the prior month.

Looking more closely into the breakdown of pricing in this report, Gas Station Sales were a clear representation of lighter gasoline prices last month, down -1%. Department Stores were even lower, -1.7%, while Consumer Discretionary more generally was -0.4% and Clothing more specifically came in at -0.6%. Thus, while we are seeing some economic resilience in these numbers, there remains some obvious slowing down of consumer appetites.

Empire State Manufacturing: Worst Month in Over a Year

Manufacturing data from New York State — known to all as the Empire State Manufacturing Survey — posted its biggest down-month since January of 2024: -20. Analysts had expected a -1.8 print for this March index, sliding from +5.7 in February, but the second double-digit down-month of 2025 already. These reports often display levels of volatility not normally seen in more comprehensive economic data, but we will keep an eye on the trajectory here.

What to Expect from the Stock Market Today

After today’s opening bell, Business Inventories for January are expected to come out. We look for another swing into positive territory — +0.3% estimated from -0.2% reported a month ago. Also, a new Home Builder Confidence Index for the month of March is expected to display in-line figures from the previous month at 42.

What’s in Store for This Week’s Stock Market

Mid-week, the Federal Open Market Committee (FOMC) coming together to decide not to move on current interest rate levels between 4.25-4.50% for the third straight month will grab many headlines. But we’ll also see Housing Starts/Building Permits, Imports and Exports, and Industrial Production numbers on Tuesday. On Thursday, Existing Home Sales, a Philly Fed survey and Weekly Jobless Claims come out.

Further, even though we look at the calendar and don’t see a new earnings season kick off until mid-April, there are some earnings reports of some significance out this week: Super Micro Computer SMCI, a noteworthy AI/cloud play, comes out Wednesday, with FedEx FDX and homebuilder Lennar LEN reporting on Thursday.

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