News Update 17-4

(JPM on equities) The big news came on the economic front as investors digest the very soft US CPI (out Fri morning) and very strong China data (better Q1 GDP and Mar IP, retail sales, and FAI). The former number is receiving more attention so far this morning and as a result TSYs have a bid while the USD and S&P futures get hit (although the S&P pullback is relatively mild).
(WSJ) The weeks-long rally in TSYs, a trend largely a function of fading reflation optimism along w/reduced Trump expectations and concerns around France and geopolitics.
(WSJ) Saudi Arabia, Iraq, and Kuwait are now targeting $60 crude, a level they feel will help their economies without spurring too much incremental US output (they had been targeting $55 oil previously).
(NYT) The shift to online appears to be accelerating and the effects this is having to traditional brick-and-mortar retail is severe. 89K retail workers have been laid off since Oct, more than the entire employee base of the domestic coal industry. Store closures this year will exceed the prior peak from 2008.
(Axios) As full-blown tax reform looks increasingly unlikely, officials in Washington are discussing the “candy option” (a tax bill that includes all the positives but none of the pain). This would involve cutting tax rates w/o any offsets (and funding it w/higher deficits.
(Bloomberg) — Almost out of nowhere, Canada has become one of the fastest growing economies in the developed world. The oil-producing nation, which struggled mightily with falling crude prices the past two years, grew at an annualized pace of almost 4 percent in the first quarter, according to the Bank of Canada’s latest estimates. No other Group of Seven economy even came close. For all 2017, the central bank is projecting 2.6 percent growth — which would put the economy at the top of the rich-country growth scale.

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