Eat, Drink, and Be Merry
The message from today’s retail sales report is Eat, Drink, and Be Merry shopping at Amazon.
The Commerce Department reports Advance Monthly Sales for Retail and Food Services jumped an unexpected 0.7% in July, fueled by a surge in non-store retailers and purchases at food and drinking places.
Amazon Impact
Amazon’s impact on retail sales is easy to spot by comparing three-month totals of 2019 to last year.
May Through July 2019 vs 2018
- Nonstore Retailers: +14.2%
- Department Stores: -5.5%
- Sporting Goods Stores: -3.0%
- Clothing Stores: -2.2%
- Electronic Stores: -4.4%
No Hint of Recession Here
This report was much stronger than expected. The consensus estimate was a gain of 0.3%.
Yet, bond yields are down again.
The 30-year long bond yield is 1.982%, down 4.5 basis points from yesterday, and holding the lower yields I posted earlier this morning. See 30-Year Long Bond Yield Crashes Through 2% Mark to Record Low 1.98%.
Mike “Mish” Shedlock
Perhaps asset deflation is starting but the those that don’t own assets still don’t realize what is coming. Party like its 1999. I’ve been buying business supplies thru online retailers lately simply to save money.
Most people don’t follow (obsess?) macro economic trends and at the moment the party is in full swing – they haven’t checked the fridge to see if there is still any beer left or if people are starting to leave. Like a party, at one point there will be a murmur that it is wrapping up and everybody will try to leave at once. Figuring out the time that happens is the real challenge.
“This report was much stronger than expected. The consensus estimate was a gain of 0.3%.”
…
True. But helped by negative revision for June. And if anyone asks – May revised down, too.
Yields tanking, again. 30 yr yield at 1.92. Down 11 bps.
Watching the long end crater this month harkens of Quint and Hooper, when they first spot Jaws.
As Chief Brody says, “You’re gonna need a bigger rate cut.”
Maybe the 30 year bond yield is not tied to the US economy.
Could it be that those that would be buying EU sovereign debt are not willing to buy negative yields and have now moved over to US debt? This would drive higher demand for US debt.The move in yields would be more reflective of supply and demand of sovereign debt with a positive yield and less a predictor of the US economy.
With all of the negative yielding securities, we are surely in a different world. So who knows?
Good point about foreign demand – Switzerland is at -1 and UBS charges their largest customers .25 on deposits of 2 million CHF or more – makes my plus 1.91% in Fidelity look great!
The problem with that idea is that currency hedging costs are currently higher than the yield differential.
All I know is my short term Treasuries look better by the day with the yield inversions. Perhaps if rates continue lower the longer terms will make sense but rates will not stay down forever.
Mish will censor you for disagreeing with him