April 29, 2019 Consensus

The Weekly Consensus – April 29, 2019 (Volume 11, Number 17)

The Big Story
May I Help You?
Douglas Stebbins

 

Amazon is the undisputed champion of ecommerce, but that does not mean that it can answer all of retail’s challenges on its own.  Case in point, last week, Amazon announced that it was going to leverage Kohl’s nationwide reach and experienced store staff to help improve its ecommerce customer experience.

Ecommerce was built upon the promise of consumer convenience.  Web-based retail was designed to allow you to shop for anything, at any time, from anywhere.  Not surprisingly, ecommerce companies have focused on perfecting the purchasing and delivery portion of the equation.  As an example, Amazon just announced that it will spend $800 million in the current quarter to upgrade its fulfillment systems and processes to allow it to make one-day shipping the default for Amazon Prime customers, a delivery speed that was unimaginable just a few years ago.

While the money and effort put into streamlining the purchase process has been wildly successful, there is one aspect of web-based shopping that has not yet been perfected: product returns.  Returns are a major challenge in ecommerce, especially when compared to traditional retail.  Approximately 30% of items purchased online are returned, compared to 9% for items purchased in stores.  With so many items being returned, consumers often consider a company’s return policy prior to making a purchase.  Having an efficient and consumer-friendly return policy can be an important ingredient in creating high customer lifetime value.

Without having a physical presence in local markets, Amazon, and other web-based retailers, have been struggling to efficiently offer a seamless option for returns that matches the convenience of the shopping experience.  While they have been expert at smashing seemingly unbreakable barriers on the delivery side, their return experience often remains a time-consuming and costly hassle for consumers.  To try to address this issue, Amazon has announced that, starting in July, Amazon shoppers can return items to all 1,150 Kohl’s stores throughout the country.

Having the return option through Kohl’s will be an added convenience for consumers and it’s not just about number of Kohl’s locations.  While there are over 1,000 Kohl’s stores in the US, there are more than 30,000 post offices (the traditional facilitators of ecommerce returns).  Given the 30:1 ratio, shoppers will probably be driving by a couple post office locations on their way to return their Amazon-purchased items at Kohl’s.  So, the Kohl’s partnership is not necessarily about Amazon leveraging the proximity of the return locations, it is more about the customer experience during the return process.

By leveraging Kohl’s stores as Amazon return locations, Amazon gives shoppers the option of dealing with trained and experienced retail professionals to assist in their return process.  If done correctly, the improved customer experience can only help to elevate both brands in the eyes of consumers.  Amazon benefits from the hands-on service only a brick and mortar retailer can deliver, while Kohl’s gets the halo effect of being part of the Amazon eco-system (and return-driven foot-traffic).  By drawing Amazon customers to their stores for returns, Kohl’s will also have the opportunity to remind web-shoppers what they have to offer from a product perspective, but maybe more importantly, from a customer service perspective.

 

Headlines of the Week

Kohl’s Surges on Deal to Expand Amazon Ties in Return Policy

Kohl’s Corp. shares jumped the most in almost four months after the company said it will begin accepting returns for Amazon.com Inc. customers at all of its stores starting in July, expanding a program it started in 2017. The department store chain began offering the free service as a pilot program that grew to 100 stores in the Los Angeles, Chicago and Milwaukee markets. Now it will increase to its more than 1,150 locations, the retailer said Tuesday. Kohl’s also issued a warrant to an Amazon investment arm to let it buy as many as 1.75 million shares of Kohl’s stock. The warrant vests over a multiyear period starting in January 2020, according to a filing.

Amazon plans to evolve Prime into a one-day free shipping program

While much of the retail industry is still working to match Amazon.com Inc.’s Prime two-day free shipping program, the retail giant has a big plan to further cement its status as an ecommerce leader: transform Prime into a one-day free shipping offer, said Brian Olsavsky, Amazon’s chief financial officer, in a conference call with analysts. “We’ve already started down this path,” he said, noting that the retailer is investing $800 million in the effort.

 

 

Apparel & Footwear

Chico’s CEO is out

Chico’s FAS, Inc., which runs the Chico’s, White House Black Market, Soma and TellTale banners, on Wednesday said that Shelley Broader has resigned from her roles as CEO and President, and member of the board. Bonnie Brooks, formerly vice chair, president and CEO of Hudson’s Bay Company and a Chico’s FAS board member, has been appointed interim CEO, effective immediately, according to a company press release. The apparel company also this month brought on former Nordstrom Rack President Karen McKibbin to lead the Chico’s brand. She replaced Diane Ellis, who left in November. The turmoil in Chico’s executive ranks reflects slow progress in its turnaround. In January, the company announced a “retail fleet optimization plan” that will entail shuttering 250 stores over the next three years and a review of the company’s operations to cut costs.

RTW Retailwinds joins online lingerie war

RTW Retailwinds, Inc. (formerly New York & Company) has tapped a former Victoria’s Secret merchandising executive for a new online lingerie brand launched Thursday, dubbed “Uncommon Sense.” Prices range from $12.50 to $20 for panties (with a buy two, get two free option), to $19.50 to $45 for bras, $24.95 to $79.95 for swimsuits and $18 to $59.50 for sleepwear, according to the e-commerce website. Brand President Pam Rice more recently led GapBody and in all has more than 25 years of industry experience. She has led “a team of female entrepreneurs” to develop what the company is calling “a lifestyle collection of bras, panties, sleepwear, and swimwear.” The collection is now available at the Uncommon Sense website, but soon will be available at New York & Company stores and its website. It’s RTW Retailwinds’ second digitally native brand, following the April 4 launch of apparel brand Happy x Nature by Kate Hudson.

Torrid withdraws IPO plans

Plus retailer Torrid last week withdrew its plans for an initial public offering, according to a filing with the Securities and Exchange Commission. The plan was originally registered publicly on July 10, 2017, according to the filing. In its filing, the company said it “believes that the withdrawal of the Registration Statement would be consistent with the public interest and the protection of investors.” Torrid enjoys strong loyalty, and has risen among consumers’ favorite specialty retail chains, according to a loyalty index from Foursquare.

The Sycamore Partners-owned women’s plus retailer has been busy since last year’s promotion of Liz Muñoz to CEO, debuting a lingerie line with supermodel Tara Lynn and, more recently, a wedding dress collection. But the space is being disrupted by a host of new online players and brands, including those offering a range of sizes rather than just plus sizes.

 

Athletic & Sporting Goods

BSN Sports Acquires Charleston’s T&T Sportsman’s Shop

BSN Sports, the nation’s largest direct marketer and distributor of sporting goods to the school and league markets and a division of Varsity Brands, announced that it has acquired T&T Sportsman’s Shop, Inc., based in Charleston, SC.  T&T Sportsman’s Shop has been serving team Sports customers in the Low Country area of South Carolina for more than 70 years.

Lululemon is taking on Nike and Adidas with a push into sneakers

Lululemon is inching in on Nike’s and Adidas’ turf as competition in the athleisure market heats up. During the company’s analyst day on Wednesday, CEO Calvin McDonald announced that the brand plans to enter the footwear market in 2019 and is currently testing new products. “We will be in footwear,” McDonald asserted on Wednesday. This will be the first time that the brand has launched its own footwear collection. It previously teamed up with sneaker label APL (Athletic Propulsion Labs) to create a mix of men’s and women’s sneakers, which is currently offered online and in select stores. “We learned a lot through the collaboration,” McDonald said. “We believe we have identified an opportunity that will be unique to us in the marketplace.”

Just Do It: Nike Sprints Into Cryptosphere, Reveals Blueprint for Crypto Marketplace

Nike just may introduce cryptocurrency to millions of athletes and sports fans around the globe.  The world’s largest supplier of athletic shoes and apparel has filed a trademark application for “Cryptokicks” with the United States Patent and Trademark Office.

The application suggests that Nike is entering the cryptocurrency space and will be exploring several blockchain-related products and services including, “Online marketplace services, namely, providing a marketplace for buyers and sellers of digital currency assets; Operating an online marketplace featuring footwear and clothing; on-line retail store services.”

Cosmetics & Pharmacy

P&G operating margin, grooming product sales dip on strong dollar; shares drop

Procter & Gamble Co reported a decline in its third-quarter operating margin and said a strong U.S. dollar hurt sales of its grooming products, sending shares of the maker of Tide and Gillette products down as much as 3.3%. Soaring commodity and transportation costs have eroded margins across the consumer goods industry over the past year. P&G said its core operating margin declined by 60 basis points to 19.9%, and was hurt by foreign exchange fluctuations. This was considerably below the estimates of some analysts. Bernstein analyst Ali Dibadj, for example, forecast an operating margin of 20.9%.

P&G, which also makes Pampers diapers and Febreze air fresheners, reported a 5 percent rise in organic sales, a keenly watched metric that excludes the impact of currency changes and mergers and acquisitions. Price hikes contributed 2 percentage points to organic sales growth.

Colgate-Palmolive Tops Q1 Earnings Forecast on Solid North American Sales

Colgate-Palmolive Co. posted modestly stronger-than-expected earnings Friday, and confirmed its full-year sales guidance, as U.S. revenues offset slumps in Latin America and Europe. Colgate-Palmolive said diluted earnings for the three months ending in March came in at 67 cents per share, down 9.5% from the same period last year and one penny ahead of the Street consensus forecast. Group sales, Colgate said, were also lower from last year at $3.884 billion but again came in modestly ahead of analysts’ estimates of $3.86 billion. Profit margins, however, narrowed 30 basis points to 59.1%. Colgate also confirmed its forecast of flat to a low single-digit increase in net sales for 2019, as well as organic revenue growth of between 2% and 4%.

Walgreens and Rite Aid raising age to buy tobacco products

Two of the nation’s largest drugstore chains are limiting the sales of tobacco products in their stores. On Tuesday morning, Walgreens announced a chainwide move increasing the age to purchase tobacco products to 21, effective Sept. 1. Later the same afternoon, Rite Aid made a similar move, with the requirement going into effect across all Rite Aid stores within 90 days. “We’ve seen positive results from other recent efforts to strengthen our policies related to tobacco sales, and believe this next step can be even more impactful to reduce its use among teens and young adults,” said Richard Ashworth, Walgreens president of operations.

Arrive Is Aiming to Be the Glossier of Clean Cosmetics

Glossier’s undeniable success has paved the way for a new wave of millennial-targeted beauty brands, some of which aim to fill what few gaps in the market the rapidly growing beauty startup has yet to fill. So far, most of those brands are in the skin-care space, going after a different age group or making more natural ingredient claims. But a new entrant into the direct-to-consumer, accessible, clean beauty space is focusing on cosmetics. As overwhelmingly crowded as the beauty space is, Zoe Brenneke, a former brand consultant and beauty editor for sites like Byrdie and The Zoe Report, found something that was missing — something she’d been looking for long before her beauty career even began. In April, she launched Arrive.

 

Discounters & Department Stores

Burlington names former Ross executive CEO

Burlington on April 23rd announced that Thomas Kingsbury will step down from his role as CEO in September after more than 10 years in the position, according to a company press release. Kingsbury will continue on as executive chairman of the board of directors during a transition period. Michael O’Sullivan will succeed Kingsbury as CEO. O’Sullivan most recently served as the president and COO of Ross Stores. Chief Merchandising Officer Jennifer Vecchio will step into the newly created role of president, chief merchandising officer. She will continue to head merchandising and planning, and oversee marketing and strategy. Vecchio previously served as the executive vice president of merchandising of mens and kids at Ross Stores from 2009 to 2011.

J.C. Penney pulls the plug on contactless payments

J.C. Penney is suspending all contactless payment options, according to a statement the company sent to Retail Dive. TechCrunch first reported the story after a customer complained on social media about the inability to make a purchase with Apple Pay at a J.C. Penney location.  J.C. Penney said customers can continue to pay manually by inserting or swiping their physical credit cards at the company’s point-of-sale terminals in stores, “an option used by the vast majority of J.C. Penney shoppers.” According to a 2017 Visa EMV News report, every U.S. merchant that accepts contactless payments needs to support EMV contactless chip functionality as of April 13, 2019. A J.C. Penney spokesperson confirmed that the retailer has suspended contactless payments to comply with the mandate “until a later date.”

At this Walmart, AI and cameras are minding the store

Walmart’s deep dive into artificial intelligence in its physical store comes as Amazon raised the stakes in the grocery business with its purchase of Whole Foods Market nearly two years ago. That has put more pressure on Walmart and other traditional retailers like Kroger and Albertson’s to pour money into technology in their stores. At the same time, they’re trying to keep food prices down and manage expenses. Amazon has been rolling out cashier-less Amazon Go stores, which have shelf sensors that track the 1,000 products on their shelves. Walmart’s U.S. online sales are still a fraction of Amazon’s online global merchandise empire, which reached $122.98 billion last year. Walmart hopes to start scaling some of the new technology at other stores in the next six months, with an eye toward lower costs and thus lower prices. As the shopping experience improves, the retailer expects to see higher sales.

 

 

Emerging Consumer Companies

Everlane launches Tread sneaker, a unisex footwear line

Everlane has launched Tread, a unisex, versatile sneaker promising comfort and minimal environmental impact. The shoes come in seven colors and sells for $98. It’s comprised of leather and suede, and made with sustainable materials, including recycled and natural rubber. The sole is 94.2% free of virgin plastic, and Everlane has pledged to eliminate virgin plastic entirely from its supply chain by 2021.

Mejuri, fine jewelry brand, raises $23 million Series B

Mejuri, the Toronto-based jewelry brand founded in 2015 by husband and wife Majed Masad and Noura Sakkijha, raised a $23 million Series B led by NEA, with participation form existing investors Felix Capital, BDC Capital, Incite Ventures and Dash Ventures. The capital brings Mejuri’s total raised to date to more than $29 million.

 

 

Grocery & Restaurants

Starbucks rival Luckin Coffee files for U.S. IPO

Luckin Coffee, the startup brand widely considered to be Starbucks’ biggest competition in China, filed for a U.S. IPO for as much as $100 million, with the potential to raise $250 million, according to Nasdaq. Beijing-based Luckin has been rapidly expanding since it launched in 2017. It now has more than 2,370 retail outlets in 28 cities across China. Luckin primarily focuses on smaller stores that specialize in pick-up and delivery. More than 90% of Luckin’s stores are “pick-up stores” with limited seating. In July 2018, Luckin Coffee raised $200 million in a fundraising round from investing giants Singapore sovereign wealth fund GIC and Legend Capital. At the time Luckin Coffee was valued at $1 billion.

Asda-Sainsbury $9 billion UK supermarket deal blocked

British regulators announced today that the proposed sale of Walmart’s Asda supermarket brand to Sainsbury’s would not be allowed to go through due to antitrust concerns. The deal valued Asda at 7.3 billion pounds ($9.4 billion), and would have created a mega retailer with 2,800 stores and combined annual sales of roughly 51 billion pounds ($66 billion). The decision followed a recommendation in February that the deal be blocked or that the merger partners be required to divest a large number of stores or either the Asda or Sainsbury’s brand. According to a Bloomberg report, in the aftermath of the blocked deal, Walmart is exploring options including an initial public offering of Asda or revisiting another sale. However, Asda’s recent improved performance — the chain has reported seven consecutive quarters of growth — eases any pressure on Walmart to act quickly.

E-commerce, own brands boost Albertsons earnings

In its fourth quarter and full year of fiscal 2018, Albertsons Companies reported same-store sales increases of 1.1% and 1.0%, respectively, while noting that the continued strong performance of its own brands had reached sales penetration of more than 25% in the fourth quarter. “We are very pleased with the trends in our business as demonstrated by our strong results in the fourth quarter and full year,” said Jim Donald, president and CEO of the Boise, Idaho-based operator of more than 2,200 supermarkets.

Home & Road

Bed Bath & Beyond overhauls its board

Bed Bath & Beyond is overhauling its board. The home good chain announced that co-founders and co-chairmen Warren Eisenberg and Leonard Feinstein will retire and that five independent directors will step down, effective May 1. In other changes, the board will now be made up of 10 directors (as opposed to its current 12) that will “reflect significant diversity” in race, gender and ethnicity, and have an average tenure of less than four years. The board overhaul comes as a group of activist investors have been seeking to overhaul the board of the struggling retailer. Bed Bath & Beyond said that current lead independent director, Patrick Gaston has been named independent chairman, effective immediately. Also, the board will form a “business transformation” and “strategy review committee” to review all aspects of its business, strategy and structure, and to reconstitute the audit and compensation committee.

Sherwin-Williams’ consolidated Q1 sales up 1.9%

Paint and wood coatings specialist Sherwin-Williams reported a 1.9% increase in consolidated sales and a 1.5% drop in income during the first quarter ended March 31. Consolidated net sales rose to $4.04 billion, from $3.96 billion during the prior year first quarter. Consolidated profits totaled $298.9 million, down from $303.6 million during the first quarter of 2018. The company said the increase in sales was due primarily to a new customer program launched in 2018, higher paint sales volume in North America stores and selling price increases. This was partially offset by soft end market demand outside the U.S. and unfavorable currency translation rate changes.

Rent-A-Center settles with Vintage Capital

Rent-A-Center said it will receive $92.5 million under a settlement agreement with Vintage Capital Management and an affiliated party following the breakdown of a planned acquisition last year and related lawsuit. The move ends all litigation between the Plano, Texas-based lease-to-own company and Vintage Capital and B. Riley Financial. Rent-A-Center was seeking payment of a $126.5 million reverse breakup fee it said was owed the company following the termination of the acquisition it initiated late last year. Vintage, meanwhile, argued against the payment and wanted to move forward with the deal. Earlier this year, Delaware Chancery Court ruled RAC had the right to cancel the merger but withheld a judgment on the breakup fee, encouraging the parties to negotiate. Under the settlement the parties expect to sign Thursday, Rent-A-Center will receive the $92.5 million payment in cash and expects to retain $80 million pre-tax after costs.

Jewelry & Luxury

Chow Tai Fook Sees Strong Growth in China

Chow Tai Fook’s sales increased in the fourth quarter, amid a rise in demand for gold products and stronger consumer sentiment on the mainland. Retail sales jumped 24% in mainland China in the three months ending March 31, while same-store sales — at branches open for at least year — climbed 9%, the jeweler reported last week. Hong Kong and Macau retail sales increased 7% during the period, with same-store sales up 1%. Same-store sales only include shops that Chow Tai Fook operates itself, as opposed to franchises.

 

The Company That Sells Love to America Had a Dark Secret

The pay-and-promotions lawsuit against Sterling Jewelers Inc. began the way a lot of these things begin: In 2005, Dawn Souto-Coons walked out of the jewelry store where she had been a successful assistant manager and into a local Tampa-area employment office, claiming sex discrimination in her store. She had been working at a Jared the Galleria of Jewelry for nearly four years. But it was only in the last few months that she began to understand that the thing that kept happening to her there, the thing that seemed to keep happening to so many of the women there, went beyond the regular, standard-issue sexism she had been hearing about her whole life. But what woman is certain that the problem isn’t her, but them?

Tiffany to Open Beverly Hills Pop-Up Restaurant in May

Tiffany & Co is opening a pop-up restaurant in Beverly Hills next month, just in time for Mother’s Day. The New York-based jeweler announced Sunday it plans to open a restaurant on the patio of its Beverly Hills location on North Rodeo Drive, serving breakfast al fresco on Tiffany dining ware. “Having a cafe at Tiffany enriches people’s interaction with the brand. It’s a destination, an experience, a great memory to share with their friends and family. And it’s a new take on what it means to be a luxury brand today,” said Reed Krakoff, Tiffany’s chief artistic officer.

 

Office & Leisure

Hasbro Shows It Can Play Nicely in A Post-Toys ‘R’ Us World

Hasbro’s better than expected first-quarter results proved it doesn’t need Toys ‘R’ Us to win in the toy business. “Many people have asked and wondered whether the company would grow absent Toys ‘R’ Us,” Hasbro CEO and chairman Brian Goldner said in a conference call after the results were released Tuesday. The first quarter proved the doubters wrong, and made Goldner and his team justifiably proud of their strategy.

The stock soared, closing up 14.23% for the day, reflecting Wall Street’s surprise that Hasbro could grow revenues by 2% (6% excluding the foreign currency exchange impact) in a post-Toys ‘R’ Us playing field. And the brands that drove the first quarter growth—particularly digital gaming hits such as the Magic: The Gathering new releases—show how much the toy industry has changed since Charles Lazarus built his chain of toy superstores into a retail category killer. But even if they don’t need Toys ‘R’ Us, Hasbro and other toy makers still want Toys ‘R’ Us to get back in the game.

 

Office Depot Store Closures: Which Locations Are Permanently Closing?

Office Depot is the latest retailer to succumb to store closures with 50 locations expected to close this year. The store closures will affect both the Office Depot and OfficeMax brands as part of the company’s three-year plan to close about 300 stores. Office Depot merged with OfficeMax in 2013, acquiring 823 stores with the purchase. Since that time, it has closed 600 locations. The company has recently shifted its focus from being an office supply retailer to providing business services to small and midsized companies. Office Depot will redesign its remaining 1,300 stores to create better electronic and printing and business services displays while reducing its office supply offering. The Office Depot stores closures will begin on May 16.

Wild One’s Debut of Healthier Dog Treats Reflects How Pet Startups Are Learning from Human Food Brands

“Sustainable” “Single ingredient.” “Ethically sourced.” These are all terms now often deployed to advertise grocery store products as more and more consumers become concerned with how their food is actually produced and processed. But typically, these are terms used to advertise food for humans. Increasingly, pet food companies are following suit in their production and marketing techniques—particularly startups and small businesses, also reflecting a trend in the greater food industry, which has been nudged to evolve in the wake of viral successes seen by the likes of green juice purveyors like Pressed Juicery or salad chains such as Sweetgreen. Wild One, a pet accessories brand whose aesthetic could be described as Everlane for dogs, announced this week that it is launching its first edible products for pups. Specifically, the company described them as “single-ingredient, ethically-sourced dog treats.”

Toy sellers fed up with popular dolls and CEO behind them

The hottest toy of the last two-plus years is starting to annoy rival toy sellers — as is the CEO behind it. A wildly popular collectible toy called LOL Surprise is the industry’s top-selling product and it’s showing no signs of slowing down. That appears to be working the last nerve of rivals, who are starting to speak up about how tired they are hearing about the miniature-doll phenomenon. “At this point LOL is so hot it’s taking almost all the oxygen in the category,” Basic Fun Chief Executive Jay Foreman told The Post. If that’s not bad enough, the man behind LOL Surprise, MGA Entertainment Chief Executive Isaac Larian seems to enjoy gloating about his success at a time of slowing sales due in part to the bankruptcy of retail giant Toys ‘R’ Us. Larian, who famously launched a GoFundMe to acquire Toys ‘R’ Us after it declared bankruptcy in 2017, recently mocked rivals for blaming their problems on the toy retailer’s downfall — before touting his own success.

Technology & Internet

Amazon has its most profitable quarter ever, but growth is slowing

Amazon wants to continue its dominance over e-commerce, but it can only grow so much. In its first quarter earnings posted Thursday, Amazon revealed record-high profit, more than double what investors predicted, and revenue was in line with Wall Street expectations, at $59.7 billion. But the company is again entering a period of high spending that, coupled with its slow revenue growth, may prove an obstacle down the line. CEO Jeff Bezos is continuing to invest heavily in artificial intelligence, the smart home, and physical retail, bets that won’t pay off for quite some time. As a result, Amazon is leaning heavily on cloud computing and advertising, and less so on its sprawling e-commerce operation, to maintain its momentum.

 

PayPal Ventures invests $11 million in retail start-up Happy Returns

PayPal’s venture capital arm is investing $11 million in Happy Returns, marking the largest funding round to date for the online returns service and bringing its total to $25 million. Happy Returns operates more than 350 Return Bars in malls, on college campuses and even inside stores like Cost Plus World Market and Paper Source for shoppers to return items bought online when the brand doesn’t have its own physical store. For retailers, Happy Returns optimizes routing returns to different end-destinations based on the condition of the goods and rules each retailer sets.

 

Finance & Economy

US new-home sales rose to a 16-month high, climbing 4.5% in March

Sales of new U.S. single-family homes climbed 4.5% in March, reaching a 16-month high, as falling mortgage rates and prices and stronger wage gains bolstered demand. New home were sold at a seasonally adjusted annual rate of 692,000 last month, up from 662,000 in February and 3% above the total a year ago, the Commerce Department said Tuesday. The median sales price of a new home was $302,700, down 9.7 percent from a year ago and the lowest level since February 2017. “This trend supports the fact that lower mortgage rates have started to entice buyers this spring and foreshadows a potential strengthening of pending and existing homes sales in the months to come.” says Danielle Hale, chief economist of realtor.com. The 30-year fixed mortgage rate was at 4.17% last week, down from 4.94% in November. And average annual wage gains have topped 3% in recent months, according to the Labor Department.

Durable-goods orders grow at fastest rate in 7 months as business investment rebounds

Orders for long-lasting durable goods posted the biggest increase in March since last summer, potentially signaling a rebound in the slower-growing industrial side of the economy. Durable-goods orders leaped 2.7% last month, led by stronger demand for autos, planes and networking equipment, the government said Thursday. Economists surveyed by MarketWatch had forecast a 0.5% increase. If cars and planes are stripped out, orders rose a smaller but still solid 0.4%. Transportation often exaggerates the ups and downs in orders because of lumpy demand from one month to the next.

Consumer sentiment slips in April while personal finance outlook hits 15-year high

After rising as the economy has recovered, sentiment is now stuck in a range. The sentiment index has averaged 97.2 during the Trump administration, identical to the April 2019 reading. In April, measures of current economic conditions and expectations fell slightly.  Still, it’s settled into a good level. When asked about their financial prospects for the year ahead, the percent who expect improvement over those who expect worsening finances has reached the best level since 2004.  Asked about longer-term financial prospects, 60% reported in the April survey that they expected to be better off financially over the next five years. While a record high, the question wasn’t asked consistently until 2011.