BNS.TO, CPA.N, CVS.N, DSCM.O, DVN.N, EM.N, EXPD.O, HPQ.N,
IPI.N, MCHP.O, MUR.N, MWA.N, MXL.N, ONNN.O, OWW.N, PAA.N,
PXD.N, SBAC.O, SPW.N, SYMC.O, T.TO, THC.N, TLM.TO, TNDM.O,
VALE.N, WES.N, WR.N
Personal Income and Spending (March)
Solid report. The slight miss in Q1 consumption growth of +3.6% relative to our +3.8% forecast was in a small downward revision to real spending January (+0.1% v. +0.2%). Big gains in February (+0.5%) and March (+0.5%) provide a strong starting point for Q2, and it will take only small sequential gains from April to June to leave Q2 as a whole near Q1's growth rate. At this point, we see Q2 consumption running at +3.5%. Meanwhile, the core PCE price index was a bit higher than expected at +0.08%, leaving the year/year pace at +1.3%. This should bottom out near +1% over the next few months. ISM (March) Strong report. The headline result was close to expectations but the underlying details were better than anticipated. Specifically, there were solid gains in the key orders, production and employment categories which was offset by some slippage in inventories and a weather -related pullback in vendor deliveries.
Construction Spending (March)
A weaker gain in construction spending in March (+0.2%) but including mixed revisions to February (-2.1% v. -1.3%) and January (- 0.7% v. -1.4%) results were about in line with what BEA assumed in preparing the advance estimate of Q1 GDP growth and did not point to any revision from the initial +3.2%. We see Q2 GDP tracking in +3.5%, with a big acceleration in final sales to +4.3% from +1.6%, helped by significant expected gains in residential investment and government construction after weak Q1 results, partly offset by a temporary pause in inventories.
Americas Equity Morning Summarye
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