What happened to retail? It looks sluggish, despite a lot of noise.
April retail sales come in unchanged, below expectations of a 0.2 percent gain.
Remember, this is not a first quarter number. This is second quarter, and retail sales are a significant component of GDP. Look for downward revisions for second quarter GDP.
Read More US retail sales unchanged in April on weak autos, furniture
Bond yields dropped—though later recovered—and the dollar index dropped to its lowest level since February.
Retail Sales are now flat or down four of the last five months.
Retail Sales
- April: flat
- March: up 1.1 percent
- February: down 0.6 percent
- January: down 0.8 percent
- December: down 0.9 percent
The pull of Easter spending into March was likely an issue, but what happened to the lower gasoline prices that were supposed to save consumers money?
John Tomlinson at ITG Investment Research notes that gas prices began increasing at the beginning of February, and are up about 25 percent since then. Consumers who live paycheck to paycheck don't notice that gas prices are down year over year, but they do notice how they fluctuate week over week.
Or maybe they were drinking more. Sales at restaurants and bars increased 0.7 percent.
They're definitely ordering online. Receipts at online stores increased 0.8 percent.
Read MoreRetailers' online sales only part of the puzzle
On a related note, Macy's missed on the top and bottom line for their first quarter, though the retailer maintained full year guidance of $4.70 to $4.80.
The problems, CEO Terry Lundgren said, included:
- Delayed merchandise shipments from West Coast ports
- Severe winter weather
- Lower levels of spending by international tourists in the U.S.
Comparable store sales were down 0.7 percent, below expectations of a gain, but Macy's is still expecting comparable sales growth of 2 percent for the full year.
On the plus side, the company is raising the dividend 15 percent to 36 cents per share, and increasing its buyback program by $1.5 billion to $2.1 billion.
Read More Wal-Mart gets new ammo in Web battle with Amazon
We will get JC Penney earnings after the close. Kohl's and Nordstrom report tomorrow.
Elsewhere:
Europe has growth! Okay, it's not off-the-charts growth, but it's still growth, and that's pushing most European bourses up roughly one percent.
The flash estimate for GDP:
- Eurozone: up 0.4 percent
- Spain: up 0.9 percent
- France: up 0.6 percent (best in two years)
- Italy: up 0.3 percent (best in four years)
- Germany: up 0.3 percent (below expectations of 0.5 percent)