Hopes for Greater Internet Speed

Hopes for Greater 5G Internet Speed Lift the Market Higher

by Louis Navellier

April 23, 2019

The Dow reached a 7-month high last Thursday and NASDAQ topped 8,000 on Wednesday as both indexes (and the S&P 500) are only a little over 1% below their all-time highs, set last fall.

5G WiFi Image

The biggest news last week was that the Apple (AAPL) and Qualcomm (QCOM) settlement on Tuesday should help both companies move on and proceed to build great 5G products. There is no doubt that 5G, which brings cable modem broadband speeds to wireless products, will trigger a massive upgrade to phones, tablets, computers, and other products that utilize wireless broadband technology. Unlike a wi-fi network, 5G is supposed to be much more readily available and bring blazing speeds to wireless products.

The next big 5G fight will be between Huawei (China) and America’s Qualcomm, Intel (INTC), Marvell Technology (MRVL), and Xilinx (XLNX), all of which are developing 5G chipsets. The Trump Administration has made it very clear that it wants the U.S. to win the 5G war for worldwide market share, but Huawei is a formidable competitor. Essentially, whoever controls 5G is expected to control the Internet several years from now, so this is shaping up to be an epic fight between China and the U.S.

(Navellier & Associates owns AAPL, XLNX and INTC in managed accounts and XLNX and INTC our sub-advised mutual fund.  Louis Navellier and his family own XLNX and INTC via the sub advised mutual Fund only.)

In This Issue

Bryan Perry reminds us what he has been saying all along – before the crowd noticed – that the rest of the world has not stopped growing. Gary Alexander lauds the new “Fed Listens” program and urges they take a giant step further – to accept the maverick new board members (Moore and Cain) nominated by Trump. Ivan Martchev explains the now-broken correlation between the U.S. dollar and oil, with a new look at China’s miraculous 26-year escape from recession. Jason Bodner examines the latest sector waves, with a particular look at Health Care, which I will expand on in my closing comments. In short, it’s all politics!

Income Mail:
Another Week – Another Global Growth Surge
by Bryan Perry
Global Blue Chips Sport Fat Yields

Growth Mail:
The Case for Adding Steve Moore & Herman Cain to the Fed Board
by Gary Alexander
Some Questions for the Fed (If They’re Listening)

Global Mail:
Odd Correlation Between Oil and the Dollar
by Ivan Martchev
More Divergences in the Energy Space

Sector Spotlight:
Catch a Wave and You’re Sitting on Top of the World
by Jason Bodner
Health Care’s “Pause for the Cause” (and Gauze)

A Look Ahead:
Good Health Care Stocks are Out of Favor – Mostly Over Political Fears
by Louis Navellier
Business Confidence is Picking Up in the Spring

Income Mail:

*All content of "Income Mail" represents the opinion of Bryan Perry*

Another Week – Another Global Growth Surge

by Bryan Perry

The ongoing debate about the U.S./Sino trade war has been quickly losing its thunder following the latest economic data out of China that showed a rebound in the world’s second largest economy, catalyzed by strong stimulus measures implemented by the Chinese government. Last week’s higher-than-expected 6.4% reading on first-quarter GDP for China quelled fears about how the trade war was so effectively bringing China to its knees and raised new concerns about how the chess board for a deal was shaping up.

No less than three banks raised their 2019 forecasts for China’s economic growth outlook following the surprise GDP surge. Citi, Barclays, and ING all jumped in the pool of investment banks clamoring to call a bottom in the emerging market slump. (Let it be noted that this column was making a case for such an assumption before the analyst community had the luxury of seeing the hard data.)

In making this call before the rest of the crowd, I was simply highlighting the bullish price action in oil and copper, while respecting the charts that were all turning higher – with a few significant “golden crosses” materializing in some leading foreign developed and emerging market ETFs. After three decades of following markets intensely, I’ve learned not to tie myself emotionally, politically, or theoretically to any position – because money will always go where it is best served and where opportunity beckons.

So we have what looks like a recovering global stock market. Despite all the worries of currency crises, geopolitical fallout, recessionary data from global economic ivory tower watchdogs, negative interest rates in Japan, and socialist cries for an end to capitalism, stocks around the world are in rally mode.

EAFE iShares MSCI Exchange Traded Funds Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The chart above is a picture that is truly worth 1,000 words. This global stock market index – the “All Country World Index,” composed of 2,771 constituents that fall within 11 sectors – is the industry’s gauge of global stock market activity. Plain and simple, it’s rising. Not a sermon, just a look at reality in 2019.

Global Blue Chips Sport Fat Yields

One would be hard pressed to find any market pundits touting any notion of prosperity outside the U.S. I’m not sure why this is so, because, quite frankly, several global non-U.S. blue chip stocks are, for lack of better words, on fire. At the top of the list is Nestle SA (NSRGY), the world’s largest food company. The stock has rallied from $75 to $95 in less than a year, sports a 2.6% dividend yield, and leads a group of mostly European blue-chip stocks that are pressing higher because of their global footprint.

(Navellier & Associates does not own Nestle in managed accounts and our sub-advised mutual fund.  Bryan Perry does not personally own Nestle.)

In fact, shares of the iShares MSCI ETF (EFA), noted above, pay a dividend yield of 1.91%, which is higher than the 1.81% of the SPDR S&P 500 ETF (SPY). So, while capital dedicated to fixed income has rushed into U.S. Treasuries, for good reason, I would argue that capital dedicated to blue-chip dividend income stocks has been flowing into U.S. equities for sure, but it is now also finding its way into global large-cap stocks that pay heftier dividends than their American counterparts.

For investors trying to sort out how to play this global stock market recovery outside the blue chips, shares of the Emerging Markets iShares MSCI ETF (EEM) are also making a powerful statement of late, trading to fresh highs this past week, with six of the top 10 holdings in Chinese companies.

Emerging Markets iShares MSCI Exchange Traded Funds Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Trying to determine the wisdom and timing of whether to venture back into foreign markets when the U.S. market has been so reliable deserves serious scrutiny. The current forward P/E ratio for the S&P 500 is 16.8, which is above its 5-year and 10-year averages. Conversely, the forward P/E of the MSCI All World Index is two points lower, at 14.77, and the MSCI Emerging Markets forward P/E is just 11.84.

Yes, there is a premium to be paid for the safety of the dollar, NYSE and NASDAQ accounting, our listing standards, and the pro-business agenda of the Trump administration. But I’m beginning to think that, as unpopular as it is with the majority of investors to allocate capital to markets outside the U.S., it is just this kind of unfavorable tone that defines a great buying opportunity.

What should investors get into if they want some overseas exposure? In general, I’d say this is no time for individual stock picking. Instead, you have the two overseas ETFs noted above to run with. I own both.

Truly definitive forward-looking information is scarce. Right now, this is a purely technical call, but by the time it becomes a fundamental call, it’s my view that all the easy money will have been made.

Growth Mail:

*All content of "Growth Mail" represents the opinion of Gary Alexander*

The Case for Adding Steve Moore & Herman Cain to the Fed Board

by Gary Alexander

I don’t generally write much about the Federal Reserve here. I think that their role is overrated. Market pundits overreact to their every word. In general, I think they are doing a fairly decent job – much better than the desperate European Central Bank or the rudderless Bank of England or Bank of Japan, so I let sleeping dogs lie. Still, I object to the tyranny of the professoriate – the 220 PhD economists and their inevitable blind spots and corporate “group think” about the economic realities as taught in the academy.

To their credit, Jerome Powell’s Federal Reserve Board is listening to outside voices. Fed Vice Chair Richard Clarida recently gave a speech (April 9) about their scheduled “Fed Listens” series of events, culminating in a June 4-5 conference dedicated to exploring views of Fed outsiders on monetary policy.

Polite listening is one thing, but President Trump’s nomination of outsiders Stephen Moore and Herman Cain would provide a breath of fresh air to the Federal Reserve Board. Fifty years ago, a PhD Economist was not considered a requirement to be Chairman of the Board. – in fact, economists were in the minority.

Federal Open Market Committee Membership by Degree Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

In February 1949, the 11-man Federal Open Market Committee had only one PhD economist. Six had a law degree, two had a B.A. degree, and two had no college degree! After all, the key words in FOMC are “open market.” The board should have experience in markets more than academic theory. The first Fed chairman with an economics PhD was Arthur Burns in 1970, and he created a decade of “stagflation.”

Steven Moore has a Master of Arts in Economics from George Mason, while Herman Cain has a B.A. in Math and a Master of Science in Computer Science from Purdue. More importantly, Cain has a great deal of business experience and seven years at the Federal Reserve. Cain was chairman of the Kansas City Fed (Omaha branch), 1989-91, then deputy chair (1992-94) and chairman of the Kansas City Fed, 1994-96. I’ve had the pleasure of meeting both men on my New Orleans Investment Conference economic panels.

Steve Moore and Herman Cain Committee Members Image

Herman Cain critiqued “The Professor Standard” at the Fed in a Wall Street Journal Op-Ed last week. He said this Professor Standard led the Fed “to pick up the pace of quantitative tightening and stick to its plan of rate hikes” last September, even as “commodity prices were falling, meaning the dollar’s commodity value was rising, a market signal of deflationary pressure.” Powell’s rate-raising “vendetta” in a slowing economy led to an unnecessary stock market bloodbath before the Fed wised up and stopped raising rates.

Cain favors creating dollar stability – not an overly strong or weak dollar, but a stable dollar – such as we sustained for long periods in 1947-70 and 1983-89, when GDP growth averaged nearly 4% per year.

Some Questions for the Fed (If They’re Listening)

Question #1: Why Does the Fed Set a Goal of 2% Inflation?  Why not Zero to 1%?

On April 9, the New York Times published an editorial entitled: “The Fed Is Courting Trouble,” in which the Times accused the Fed of allowing inflation to remain “persistently below the 2 percent annual rate the Fed regards as optimal.” Whoa, Nelly! Since when is low inflation a sign of failure, and why does the Fed seek 2% inflation as a goal? That delivers a doubling of prices about once per generation (35 years).

United States Core Inflation Rate Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

This is failure? – According to the New York Times, it’s failure to achieve a 2% inflation target goal.

Low inflation or no inflation should be our goal, not 2%. Our period of greatest growth was the Industrial Revolution of the 1870s to 1914 – a time of slight deflation. So was the Roaring 1920s. We had price stability in the 20 years after World War II. By contrast, high inflation in the 1970s was a nightmare.

Question #2: Why Not Let the Market Set the Price of Borrowing (i.e., Interest Rates)?

Markets around the world are telling us the value of the U.S. dollar by bidding U.S. interest rates down or up. Currently, there is a global liquidity run into U.S. dollar assets, pushing Treasury rates down. Why get in the way of that several trillion-dollar-per-day tsunami of capital? Let the world tell us what our interest rates should be. Why get together and set “price controls on the cost of borrowing money” by regulating key short-term interest rates in the Fed’s widely-watched 8-times-a-year FOMC meetings? Economists know rent controls and price controls don’t work, so let markets work instead of forcing your ideas on us.

Question #3: If You Don’t Raise Rates, Do You Really Need 220+ PhD Staff Economists?

The Federal Reserve has serious responsibilities in overseeing banks, and for that they need qualified financial professionals, but do they really need 220+ PhD economists in the Federal Reserve’s Temple in Washington, DC? Maybe this is a case of too many hammers in search of too many nails to pound.

Just asking…

Global Mail:

*All content of "Global Mail" represents the opinion of Ivan Martchev*

Odd Correlation Between Oil and the Dollar

by Ivan Martchev

It used to be said that a strong dollar meant weaker oil prices and vice versa, but a lot has changed in that relationship in the last year. As the dollar kept rallying, the oil market stayed firm as the whiff of new Iran oil sanctions kept oil prices stronger than they otherwise might have been. Then, Iran oil sanctions turned out to be not as severe as feared and the hoarding of oil leading up to the sanctions, combined with a sharp downturn in the Chinese economy took the price of crude from $77 to $42 in a single quarter!

To be fair, it’s not just the strong dollar itself that made oil historically weak, but what caused the dollar to be strong. The dollar would normally be strong in Federal Reserve tightening cycles, which tended to slow the global economy and cause the dollar to trade higher on interest rate differentials. There are multiple other factors, in addition to this well-established feedback loop affecting oil prices.

Recovering to around $64 at present, one would think that all is well in the crude oil market, but we again face a very firm dollar, courtesy of Fed balance sheet runoff activities (aka QT) and the ECB’s belated QE activities, as well as aggressive Chinese fiscal and monetary stimulus that affects the demand side of crude oil markets. After all, China is the biggest importer of crude oil on global markets and a pickup in economic activity in China impacts prices, particularly in the seasonally-strong March-September period.

Crude Oil versus United States Dollar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The Chinese sharp slowdown and rebound, Iran oil sanctions, and a rather messy global economy have caused the correlation between the dollar and crude oil to break down rather dramatically in the past year. This also causes problematic correlations between oil and various commodity indexes, where energy is often the heaviest-weighted component.

But what about industrial metals, which are less political. but equally economically-sensitive?

IndustrialMetalsVersusDollar.png

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Industrial metals have also perked up with the rebound in energy prices, but they are not as “perky” as crude oil. Could it be that the Chinese economy has experienced an economic rebound, while the rest of the world has not done as well, resulting in weaker industrial metals and stronger crude oil?

Turning around an economy the size of China is like turning around an aircraft carrier. China managed to arrest their economic deceleration yet again, with their infamous lending quotas. Frankly, I have no idea how long this “forced lending” business can maintain an expansionary economic cycle that is now 26 years long. I only know that they cannot extend it into perpetuity, which raises interesting questions as to the severity of the downturn when it arrives, as so many problems and unproductive uses of capital have been swept under the proverbial Beijing carpet.

More Divergences in the Energy Space

One correlation that has been holding up well is the one between the MSCI Emerging Markets Index and crude oil. It has been surreal how long it has lasted and keeps on holding. A large part of the MSCI index is economies that benefit from high crude oil prices, while the other part is economies that use a lot of crude oil. When demand for crude oil is high, both consumers and producers do well.

MSCI Emerging Markets Free Index Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Emerging markets have rebounded dramatically with the rebound in crude oil prices, but I think the situation has been disproportionately impacted by China, which has an estimated GDP of $14.2 trillion for 2018 and as such is bigger than the next 10 emerging economies combined, so if China is not doing well the rest of the emerging markets universe is not doing well, either, save only for India. This is because India is a somewhat closed economy driven by its own internal dynamics and tends to benefit tremendously from lower oil prices (when China is not doing well). You could say that when it comes to economic performance, in a large way what is bad for China to a considerable degree is good for India.

Philadelphia Oil Services Index Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

When it comes to crude oil, there is something that doesn't quite fit the picture. The PHLX Oil Service Index took out its low from 2008 and the oil price didn't. On the other hand, the oil price did take out its low from 2008 in early 2016 but the OSX index didn’t. The point is that this index houses oil service companies that are very sensitive to oil prices and drilling budgets. An oil price at $64 does not imply an OSX level of $99 but more likely north of $150. Either the OSX index will rally or the stocks in the index are sensing a weakness in the crude oil prices that is not reflected by the price of crude oil … yet.

I think the rebound in crude oil prices in 2019 is primarily driven by China. I think this strong crude oil price is very misleading, as a rebound in the Chinese economy is driven by their infamous lending quotas. That does not mean that the rest of the world is doing all that well, save for the United States.

Sector Spotlight:

*All content of "Sector Spotlight" represents the opinion of Jason Bodner*

Catch a Wave and You’re Sitting on Top of the World

by Jason Bodner

Waves transfer energy, not matter, meaning water can bob up and down without moving side to side, because it’s riding on a wave of energy. Waves have crests and troughs: A wave’s height is the distance from its trough to its peak. When we think about a surfer escaping a crashing wave, we might be missing what’s going on underneath the wave. Waves don’t collapse until they reach depths of 1.3 times their height. It’s when waves get to shallow water that they tumble forward and trip. But don’t let that fool you, they can still be very powerful. A typical tsunami’s length is 100 times its depth. A 13,200-foot-deep wave can travel 440 miles per hour across the ocean – almost as fast as a commercial jet.

Riding the Wave Image

Markets are cyclical – like waves in a pool. A lot of little waves can mostly move together, but when all waves move together they can slap up over the top of the pool, sometimes enough to knock over a wine glass (this is an adult pool we’re talking about). That’s like what happens when the whole market falls – all sectors can more-or-less fall in tandem downward, and the collective energy is amplified.

Sectors can also crest and trough individually. Let’s look at what’s sloshing around the pool of the S&P 500 lately: Value won last week’s shortened trading week in a small-scale rotation. Investors moved capital out of growth and small caps and into “safer” perceived stocks, such as those in the Dow Jones Industrials, the best performer of the “big 4” indexes. The Russell 2000 was down -1.2% and the S&P 500 finished slightly lower. The NASDAQ was slightly higher, largely due to semiconductors.

When we look at the individual sectors, it’s clear that growth continues strong. Information Technology, Industrials, and Consumers were all up nicely. Again, the PHLX Semiconductor index was having a great week. It posted a +4% performance for a total gain of +45.7% since Christmas. That’s a gain of +0.39% per day including weekends! That’s not a single stock, but an index of 30 of them! Let’s put that into perspective:  If you bought a $500,000 house on Christmas Eve, it would be worth $728,500 today.

Mid-range market pains were localized to Real Estate and Utilities. These are rate-sensitive securities and are often chucked aside when growth is in the air. Real Estate shed -3.2% and Utilities lost -1.6%.

And then there was Health Care.

Standard and Poor's 500 Sector Indices Changes Tables

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Health Care’s “Pause for the Cause” (and Gauze)

One wave crashed big. Last week saw a bludgeoning of the S&P 500 Health Care Sector Index, down 4.39%. It’s the weakest index since Christmas and a whipping boy right now. Do you recall when candidate Hillary Clinton said she had her eye on health care in September 2015? The sector got pounded, only to come back swinging. I believe this year looks like a similar political attack. Health Care is once again a whipping post for the upcoming campaign. Democrats want “Medicare for All” and Trump is openly against the “thievery of big pharma.” The news cycle paints a lose-lose situation for health.

As a result, Health Care saw unusual selling in 50% of the stocks we track this week. It’s a clear outlier.

Health Care MAP Signals Unusual Selling Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Political stories are big in the news, but we live in a data-driven world. Selling ripped through Health, but I noticed that while the sector is scoring very weakly, technically, Telecom is still a much weaker sector in terms of fundamentals. We looked at prior times of intense Health Care sector selling, and what that meant for forward returns. Based on these findings, there is cause for pause – and a little gauze.

Wednesday’s data alone showed that over 28% of our Health Care universe returned a UI sell signal.

To put this rare event into perspective:

  • YTD through April 17, the daily average of Health Care stocks showing UI sell signals was 1.52%.
  • Going back to 2013, there have been only 14 trading days where +25% of our Health Care universe has showed UI selling.

Below are all 14 days since 2013 in which +25% of our Health Care universe saw unusual selling.

Fourteen Days of UI Selling in Health Care Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

At first glance, there tend to be more days of extreme selling after the first day of big selling. This indicates the chance of some more daily bumps ahead. Extreme selling days are rare, but the average forward return for Health Care is not strong. But two things I know: (1) The nation (and the world) is aging, and (2) People won’t stop getting sick. When this rotation is over, there will be great bargains.

Before you worry about the state of Health Care tomorrow, remember the words of Dale Carnegie:

Dale Carnegie Quote Image

A Look Ahead

*All content in this "A Look Ahead" section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.*

Good Health Care Stocks are Out of Favor – Mostly Over Political Fears

by Louis Navellier

We expect wave after wave of better-than-expected first-quarter announcements that will propel quality stocks significantly higher in the upcoming weeks. One example of positive sales and earnings is UnitedHealth Group (UNH), which reported last Tuesday that its first-quarter sales rose 9.3% and its earnings rose 24% vs. the same quarter a year ago. UNH beat analysts’ consensus sales estimates by 1.1% and operating earnings estimates by 3.6% and also raised its earnings guidance. The stock initially responded positively then corrected, then slowly recovered on Wednesday and Thursday trading.

Health Care Workers Image

In my view, UNH didn’t rise far on the good news because there has been a lot of high-volume selling pressure on health insurance companies based on unfounded fears that “Medicare for All” will pass at some point in the long-distant future (after 2020) if Bernie Sanders or any other avowed socialist candidate wins, which would effectively put most health care companies out of business.

Even if Bernie wins in 2020, I doubt this would happen. Essentially, Medicare for All would be a single-payer health care system for everyone. A George Mason University study reported that Senator Bernie Sanders’ “Medicare for All” proposal would cost $32.6 trillion over 10 years, nearly doubling the total federal expenditures for an already-bloated federal government. As soon as that huge increase in cost is revealed, it is expected that Medicare for All would fail to get any serious support in the Senate. As a result, in my opinion, UnitedHealth Group remains a great near-term buy, despite profit taking last week.

This reticence to buy a good stock reminds me of how health care stocks went into the dumpster back in September 2015 when candidate Hillary Clinton promised to stop “price gouging” by pharmaceutical and biotech companies if elected. First of all, she was not elected, and also, if elected, she may not have had the power to pass her plans through Congress, so it’s usually a mistake to anticipate political changes years in advance. The market tends to panic first and think later, giving us a great buying opportunity.

Business Confidence is Picking Up in the Spring

Today’s lower interest rate environment is starting to improve business confidence. For example, the National Association of Home Builders (NAHB) sentiment index rose to 63 in April, up from 62 in March. The NAHB index peaked at an 11-year high of 70 back in May then dropped to 56 in December and has been improving steadily since then. As the weather improves, more potential homebuyers emerge. The fact that homebuilder sentiment is improving bodes well for improving GDP growth.

The Fed announced on Tuesday that manufacturing output was flat in March and declined at a 1.1% annual pace in the first quarter. Wood products and auto parts declined over 2% in March, but as the construction and automotive sectors recover in the spring, manufacturing output should also recover.

On Wednesday, the Fed released its Beige Book survey, in which all 12 Fed districts reported “slight-to-moderate” economic activity in March and early April. All 12 districts also reported sluggish sales at retailers and auto dealers. Agriculture conditions were weak and there were continued concerns about the Midwest flooding, heavy snow, and the likelihood for more flooding as the mountain snows melt.

Home sales and tourism were the bright spots in the Beige Book survey in the “few” Fed districts that reported improving economic conditions. Overall, the Beige Book survey will likely cause the Federal Open Market Committee (FOMC) to remain “patient” and to hold off on any key interest rate increases.

The best news for GDP growth last week was that the Commerce Department reported that the trade deficit continues to shrink. In February, it reached the lowest level in eight months, declining 3.3% to $49.4 billion, vs. a revised $51.1 billion deficit in January. In February, exports rose 1.1% to $209.7 billion (a 4-month high), while imports rose just 0.2% to $259.1 billion. A 60% surge in commercial aircraft shipments and a 16% surge in soybeans were largely responsible for the export surge. The trade deficit in the first two months of 2019 is 7.6% lower than in the same period in 2018. However, Boeing’s 737 Max woes are expected to show up in the March statistics, so the recent trade gains may be fleeting.

The U.S. trade deficit with China declined to $30.1 billion in February, down from $33.2 billion in January, and the trade deficit with the European Union (EU) hit a three-year low in February.

Booming domestic crude oil production and rising U.S. crude oil exports are also helping to reduce the U.S. trade deficit. You may wonder why crude oil prices continue to rise as U.S. crude oil production soars. One reason is seasonal, since worldwide demand rises in the spring. Other reasons include a brewing civil war in Libya, sanctions on Venezuela, and the expiration on U.S. waivers on imports of Iranian crude oil. It now looks like crude prices may remain high through the summer months.

These higher gasoline prices helped boost retail sales in March. The Commerce Department announced on Thursday that retail sales soared 1.6% in March, the biggest gain in 18 months, substantially above expectation of a 1.1% rise. New vehicles sales surged 3.1% and gas station sales soared 3.5%. Excluding vehicles and gas stations, retail sales still rose a robust 0.9%. Overall, there is no doubt that improving spring weather helped to boost March retail sales, which bodes well for first-quarter GDP growth.


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