Equities Flat Despite Good Data

Economic Data

- (US) Goldman Economist: Chain Store Sales w/e Mar 20th w/w: -0.7%; y/y: +3.0%
- (CL) Chile Feb PPI M/M: -1.1% v -3.8% prior
- (US) Feb CPI M/M: 0.2% v 0.2%e; Y/Y: 0.0% v -0.1%e
- (US) Feb CPI Ex Food and Energy M/M: 0.2% v 0.1%e; Y/Y: 1.7% v 1.7%e
- (US) CPI NSA: 234.722 v 234.738e; CPI Core Index: 240.247 v 240.122e
- (BR) Brazil Feb Total Federal Debt (BRL): 2.239T v 2.247T prior
- (US) Redbook Retail Sales w/e Mar 20th: +2.8% y/y, Mar MTD: +1.1% m/m; Mar MTD: +2.7% y/y
- (US) Jan FHFA House Price Index M/M: 0.3% v 0.5%e
- (HU) Hungary Central Bank Rate (NBH) cut Base Rate by 15bps to 1.95%, less than expected
- (BR) Brazil Feb Current Account Balance: -$6.9B v -$7.5Be
- (US) Mar Preliminary Markit Manufacturing PMI: 55.3 v 54.6e
- (US) Feb New Home Sales: 539K v 464Ke
- (US) Mar Richmond Fed Manufacturing Index: -8 v +3e
- (BE) Belgium Mar Business Confidence: -6.3 v 7.5e

The February US new home sales data was very strong and CPI has returned to growth for the first time in three months, but US stocks are mostly flat on the session. As of writing, the DJIA and S&P500 are up 0.06% each, while the Nasdaq is up 0.38%.

CPI returned to growth in February, delivering the first positive growth in headline CPI since October and the first gain in energy prices since June. Fed Chair Yellen and many Fed officials have reiterated that the declines in energy prices are transitory, and this is the first hard economic data to support their contention. Last month, domestic gasoline prices rose 2.4%, the largest increase since late 2013. The dollar weakened through the CPI release until the open of cash equity trading, with EUR/USD peaking at 1.1030, then retracing all of the gains seen over the prior 12 hours and fell back to 1.090.

WTI crude prices were soft during the Asian session on the weak Chinese PMI data but then rose from $47 as high as $48.50 before softening again. Brent took a round trip from $55 after the Chinese data as high as $56.60 and then fell back to $55. In a press interview, a senior Persian Gulf OPEC official said that prices (of Brent) would likely be around $55-60 through April, although after April US refinery work and even higher crude oil inventories may add downward pressure to prices. Another round of weekly inventory data is on tap with the API data later tonight.

The February new home sales were unexpectedly strong, widely topping consensus estimates and contrasting sharply with the soft Feb existing home sales data out yesterday. New home sales in February were up nearly 25% y/y and up 87% y/y in the Northeast, posing a difficult dilemma for explanations of soft data due to severe winter weather. Homebuilders are seeing solid gains on the report, with HOV leading the pack higher, up 3.5% on the session.

Shares of Whiting Petroleum are down 20% this morning after the firm filed to offer 35M common shares, signaling that reported efforts to seek a buyer have withered. In the filing that accompanied the declaration the company stated it is "not pursuing any significant strategic transaction at this time." Back at the beginning of March, there were reports that company was looking to sell itself.

Among other movers, mining giant Freeport McMoran cut its dividend by 84% as a prudent measure to strengthen the firm's balance sheet and preserve cash. Sonos Networks is down 28% after the firm slashed its Q1 outlook, citing a shortfall in expected orders. Chesapeake rose 4% on word activist Carl Icahn bought a 10.98% stake in the firm back in December, although the names has given up gains.

Looking Ahead

- 13:00 (US) Treasury to sell $26B in 2-Year Notes
- 13:30 (BR) Brazil Feb Total Federal Debt (BRL): No est v 2.247T prior
- 16:30 (US) Weekly API Oil Inventories
- 17:45 (NZ) New Zealand Feb Trade Balance (NZD): 325Me v 56M prior
- 19:00 (KR) South Korea Q4 Final GDP Q/Q: No est v 0.4% prelim; Y/Y: No est v 2.7% prelim