Good Tuesday AM,

Retail sales numbers out today. They are part of the bigger economic picture and account for 70% of GDP. They came in hot as expected. 0.9  on the top line and the core (ex-autos) at  0.6. Other data out today, Industrial production and capacity utilization both came in hotter than expected. The homebuilder survey came in weaker so builders are seeing the market cool a bit.

With the data, bonds are pulling back a bit as expected. I am not concerned at this point. I will be concerned if we close above 3% on the ten-year. Mortgage Bonds are also pulling back but so far holding support. It is important we hold and don’t sell into the next trading channel. That will open the 10-yr note back up to 3.20 which would hurt.

Fed Chair Powell is speaking at the WSJ Future of Everything conference and seems to be more dovish about the Fed’s path. We will see if the Fed can Navigate a soft landing (reduce inflation while preventing a recession)… fingers crossed but not convinced.  I am still cautiously optimistic about the short term.

Please remain safe and healthy, make today great.