There were a few important economic news items this morning. Here’s a brief summary:
Retail sales dropped 1.1% last month. This was a surprise since economists expected an increase of 0.3%. This is a bit disappointing after last week’s same-store sales. The fact that Easter was in March a year ago might have been a factor.
The Producer Price Index plunged 1.2% in March. This was also a surprise since economists weren’t expecting any change. The “core rate,” which excludes food and energy prices, was unchanged. As the dollar softens, oil and food prices should begin to rise but apparently it hasn’t happened yet.
Johnson & Johnson (JNJ) reported Q1 earnings of $1.26 a share which is the same amount it earned for last year’s first quarter. This was slightly above Wall Street’s consensus of $1.22. J&J is the Goldman Sachs of healthcare so its results will have a major impact on the entire industry.
For now, I rate J&J a sell. Let’s wait until we see evidence of earnings growth.