Data Points
- April retail sales fell 16.4% from March, the largest monthly drop on record
- Brent Crude, the international oil price benchmark for oil, closed last week at $33.72 per barrel, up 73% from its late-April low
- Industrial production in the U.S. decreased 11.2% in April from the prior month
Top Three Market Headlines
Retail Sales Suffer Historic Fall: Sales at U.S. retail establishments fell 16.4% in April from the prior month, the largest drop on record, as COVID-19 containment measures dramatically curtailed consumer spending at restaurants, malls, and many other stores. Clothing stores took the biggest hit as sales fell 79%, followed by electronics & appliance stores (-61%) and furniture stores (-59%). The only category that posted an increase, not surprisingly as consumers stayed home, was internet retailers (+8.4%). The recent collapse of in-store shopping proved to be the last straw for a group of retailers already struggling with consumers’ on-going shift to e-commerce, as Neiman Marcus, J. Crew, and JC Penney all filed for bankruptcy last week.
Oil Markets Start to Rebound: Supply and demand fundamentals in the oil market have begun to re-balance in recent weeks, providing support to oil prices that had plummeted nearly 80% from the start of the year through late April. Brent Crude, the international benchmark for oil, finished last week at $33.72 per barrel, up from a year-to-date low of $19.50 on April 21. Demand for the energy commodity has ticked up as global economies begin reopening, while massive, coordinated production cuts from OPEC+ has helped to curb the supply glut that has persisted since February.
U.S. Industrial Production Plunges: According to data released last week by the Federal Reserve, business conditions continue to deteriorate across U.S. industrial companies, as industrial production—a measure of factory, mining and utility output—fell 11.2% in April from the prior month. The decline marked the largest monthly drop in the 101-year history of the index, and was largely keyed by a 13.7% plunge in manufacturing output. All major industry and market groups felt pressure, with a notable 70% reduction in automobile output. In a related note, the capacity utilization rate for the industrial sector fell to 64.9% in April, 8.3 percentage points below March and a record low for the measure since its inception in 1967.