Business

Headlines will crow of the seasonally-adjusted 'beat' of expectations for the Dallas Fed survey (-13.6 vs -25.8 exp) but this is the 15th month in contraction (below 0) - something only seen in recession. Scratching below the surface we see employees, workweek, and capex all in contraction and forward expectations for new orders and employment tumbled. Perhaps that reality is what drove one respondent to rage, "anyone who says the economy is not in recession is peddling fiction."

With stock markets roller-coasting by the most on record, February pending home sales rose 3.5% MoM (seasonally-adjusted) dramatically beating expectations. In fact, sales spiked 29.5% MoM (non-seasonally-adjusted) - the best February spike ever. Price gains have slowed notably, which is being cheered by NAR's Larry Yun, but notably the majority of the sales surge in Feb was driven by an 11.4% spike in The Midwest (biggest since Dec 2008).

Panic buying homes in Feb:

On Friday, the US government's Bureau of Economic Analysis had some good and some not so good news: the good news was that the final estimate of Q4 GDP was revised higher from 1.0% to 1.4% (driven by an odd rebound in spending on Transportation and Recreational services). The bad news was that pre-tax earnings tumbled 7.8%, the most since the first quarter of 2011, after a 1.6 percent decrease in the previous three months, suggesting that while it is only the "strong" US consumer that is keeping the US economy afloat on their shoulders.

In February headline data for income modestly beat expectations (+0.2% MoM vs +0.1% MoM) and spending met expectations at +0.1% MoM respectively. However, income growth YoY slowed to 4.0% - near its weakest since Nov 2013. Spending growth also slowed to +3.8% YoY (from 2.9% in Jan) but the big story is the major downward revisions in spending. January's +0.5% 'surge' in spending was revised to a mere +0.1% trickle - the weakest in over a year.

Since QE3, income growth has been a one way street lower...

The one catalyst most responsible for sending the price of oil from its 13 year lows hit in early February some 50% higher in the following month, has been the recurring rumor about an "imminent" OPEC production freeze meeting which was initially supposed to take place in early March, then on March 20, and now on April 17 (we expect this to be rescheduled shortly as well).