Daily Market Color April 30, 2018Stocks Have Positive April Consumer Spending Increases The Commerce Department’s report on personal income and consumer spending for March headlined today’s economic data reporting. Detailed in the report, personal income rose 0.3% last month (missing estimates of 0.4%), while consumer spending, which accounts for 70 percent of US economic activity, met estimates and grew 0.4%. This is a reverse of the prior month when spending lagged income growth. The details in this report should bolster the opinion that spending will increase in the second quarter as the tax cuts and other wage gains begin to accrue in workers’ accounts and consumers will use those gains, increasing consumption. Also included in today’s report details, the savings rate fell to 3.1% from 3.3% in March. With the FOMC mindful of its 2% inflation target, today’s Personal Consumption Expenditures Price Index (PCE) release gave the committee a 2% measure of inflation to discuss. The PCE YoY hit the FOMC’s target for the first time since February of last year. While these are strong numbers, it’s probably not enough to move the FOMC off of it’s gradual pace of rate hikes over the coming meetings. Oil Up as Israel Issues Iran Warning Today Israeli Prime Minister Benjamin Netanyahu said that Iran has a secret plan to build nuclear weapons in violation of the 2015 agreement. Israeli intelligence shared its evidence with the United States, and the US has verified their authenticity. The timing of this report casts doubt on the continued participation of the United States in the 2015 agreement with Iran. With less than two weeks before the May 12th deadline to reinstate sanctions, President Trump has said that a nuclear armed Iran can not be a possibility. As a result, there continues to be a lack of acceptance of oil from Iran by many participants in the oil market. This along with OPEC’s continued production cuts has driven the price of crude oil futures higher. WTI Crude oil futures closed up 0.5% at $68.41 a barrel. Stocks Finish Month in Positive Territory While down on the day, stocks posted gains for the month of April. The DJIA was down 0.61%, while the S&P and the NASDAQ finished lower 0.82% and 0.75%, respectively. The 10-year UST finished the day close to unchanged, closing at a yield of 2.95%. Across the treasury curve, notes were largely unchanged, moving no more than 1 bp in any major maturity. The US Dollar (USD) was up 0.5% vs the Euro (EUR) and 0.1% vs the Pound (GBP).