Report (Premium Edition) 03-15-2021

The pop in longer-dated rates on Friday weighed on the tech-heavy NASDAQ, but the increasing optimism over the recovery helped propel the Dow and the S&PS 500 to new highs. The 10- and 30-year maturities closed 9 bps cheaper at 1.628% and 2.386%, respectively, the highest in over a year. The break of the February 25 peaks added to the selling and will keep trading jumpy.

Looking at the chart above, we can see that the 10YR is on a very bullish trend, but so is the S&P 500. Other than a few dips, we have yet to see any real sign of reversed correlation. That being said, if the 10YR continues to climb, we fully expect the S&P 500 to dip.

Rates will be a key topic for the markets this week with the FOMC meeting and Fed Chair Powell’s press conference. There will be several interesting data reports too, though there may be too much noise in the numbers to glean much information. Data highlights this week will be retail sales, production, regional manufacturing PMIs, and trade prices. Today’s slate has the March Empire State index, seen dipping to 10.0 from 12.1. January Treasury TIC flows are on tap as well.

Key Drivers for the Week of March 15

TIP – This is a 1 minute brief bullet-point summary as a tool that gives them a fast and simple list of what to watch for and talking points for the week.

• Markets monitoring updraft in bond yields and response from monetary authorities
• FOMC expected to assure lower for longer, maintaining its rate and QE posture
• Fed Chair Powell can not improving economy, but pandemic still weighing on activity
• U.S. data on retail sales, production, regional manufacturing PMIs, housing starts
• Canada’s slate: CPI, retail sales, housing starts, existing home sales, new home prices
• BoJ expected to keep policy unchanged but could tweak for a more flexible posture
• Bank Indonesia and Taiwan Central Bank expected to keep policy unchanged
• European data on CPI, trade balance; German ZEW investor sentiment, PPI
• UK optimism picking up on vaccine distribution, sharp drop in virus, mortality
• BoE expected to keep policy steady by unanimous vote

Key Market Trends

Tip: Use this as a quick guide on the short-term direction of key markets. I once had a client that would call me nearly every day asking the direction of the markets. This is a quick cheat sheet to know the trend and help understand what is happening with the markets.

S&P 500 Sectors

Tip: Use this section to know the performance of various sectors, weight portfolios, or look for trades. Modern portfolio theory stresses the importance of diversification, but recently several sectors like technology have out-performed others like utilities. This is also a way to narrow the sectors to find investment opportunities.

REIT Alert: Due to Covid-19, there is a large percentage of people that have not paid rent or mortgages. We are very worried about the effect it could have on real estate investment trusts’ (REITS) value. Even though the sectors may trending bullish, we believe that REITs could have a significant drop in value.

Week Ahead: Policymakers Provide Assurances

On March 15, 2021

The Fed, BoJ, and BoE will all have an opportunity to further address the run-up in yields this year. We suspect all three banks will maintain current commitments to extraordinary accommodation for quite some time longer as they express confidence that building inflation pressures can be kept under control amid building confidence in the recovery. Markets will look mainly to the Fed after the ECB announced last week it will step up the pace of asset purchases over the next months, sending a clear signal that the Bank will step in should reflation trades push up yields too high too quickly. The FOMC, however, is highly unlikely to alter its QE buying to try to cap rates. Powell indicated in recent comments the Fed is worried about disorderly markets, not so much the rise in rates. We expect the Fed to sound more optimistic on the outlook, but still note downside risks and stress the labor market needs to get back to pre-pandemic levels before removing accommodation. In Asia, the BoJ will keep rates steady, while likely reiterating Governor Kuroda’s recent view that the yield curve needs to remain “stably low.”

NORTH AMERICA

It is a busy week in the U.S. with the FOMC meeting front and center (Tuesday, Wednesday). However, there are several key data reports that will cover a number of sectors of the economy. Top billing will go to retail sales, though there is also industrial production, the Empire and Philly Fed manufacturing surveys, housing starts, and trade prices. There are also auctions of 20-year bonds and 10-year TIPS.

As for the Fed, while no changes to the policy stance are expected, there will be a lot of interest in the new economic projections, including the dot plot. It is universally expected that the Fed will keep the rate stance steady at 0% to 0.25% and is widely expected to maintain the $120 bln per month in asset purchases. The Fed Chair has largely shot down expectations for a shift, noting that the Fed is concerned with disorderly markets and not the increase in longer-dated Treasury yields. The Fed’s ability to remain sidelined was boosted by the ECB’s surprise action after the Bank announced last week that it will “significantly” step up its asset purchases to help steady rate markets and cap the upside. Central banks have been jawboning to try to prevent a tightening of financial conditions, especially after the February 25 spike in the 10- and 30-year Treasury rates that sent global shockwaves. But now the ECB is actively engaged. With the ECB doing the heavy lifting, we suspect Powell can maintain his wait-and-see posture, even as the 10- and 30-year yields jumped last week to respective highs of 1.64% and 2.40%.

Be on alert for the Fed to give a more upbeat assessment on growth given current conditions which would normally pressure Treasury yields higher. However, the Fed will again emphasize the downside risks, stressing that there is still a long road to hoe before the accommodation is removed. And of course, policymakers will add that they will remain accommodative until their goals are met. On inflation, Powell will again acknowledge upside risks but stress they are temporary and largely due to base effects. That is the message sent by ECB’s Lagarde too. She also warned of a spike in prices and said she will “see-through” any increase because the medium term outlook is subdued.

The data calendar will be of interest although there is likely to be a considerable amount of noise in the releases due to the widespread effects from the polar vortex that struck much of the country in mid-February, along with distortions from seasonals. A -2.0% tumble is on tap for February retail sales (Tuesday) with a -1.8% ex-autos decrease, following respective January jumps of 5.3% and 5.9%. The risk around this report is mixed — on the upside there is a solid bounce in gasoline prices and potential further momentum from the vaccines. But there could be a strong headwind from the Texas freeze and cold weather across the midwest and east coast. Also, refund payments were delayed to the end of February, prompting an extra income hit, before an expected March income surge with the next round of stimulus checks.

The regional Empire state (Monday) and Philly Fed manufacturing (Thursday) indexes are seen dipping in March, but to still strong, expansionary levels. Industrial production (Tuesday) is projected to rise 0.2% in February after the 0.9% January gain. The risk is to the upside on these forecast — factory activity continues to ramp up in the face of ongoing supply bottlenecks. Coronavirus vaccines are providing a lift through the current quarter, as are two rounds of stimulus payments in January and March. Finally, housing starts (Wednesday) are expected to ease to a 1.450 mln pace in February from 1.580 mln in January, driven by a likely big hit from the winter storm, spiking mortgage rates, and surging building costs.

The earnings docket is thin this week: Monday is empty. Tuesday has CrowdStrike, Lennar and Coupa Software. Wednesday has Cintas, ZTO Express, and Five Below. Thursday brings Nike, Accenture, FedEx, Dollar General, and Weibo. Friday has no earnings reports due.

In Canada, CPI and retail sales will be the focal points of the calendar. CPI (Wednesday) is expected to pick-up to a 1.1% annual growth rate in February from the 1.0% y/y pace in January. The CPI is seen rising 0.5% in February (m/m, nsa) after the 0.6% pop in January. Retail sales (Friday) are seen falling -3.1% in January after the -3.4% tumble in December. The ex-autos sales aggregate is expected to contract -3.0% after plunging -4.1% in December. February housing starts (Monday), January manufacturing (Monday), February existing home sales (expected Monday) and the new home price index (Thursday) also populate the calendar. There is nothing scheduled from the BoC this week. Last week, BoC Deputy Governor Schrembi said the “economy still requires extraordinary support from our monetary policy,” citing the pick-up in long term unemployment, the uneven impact of job losses and continued uncertainty over the evolution of the virus. The Deputy Governor’s remarks were, not surprisingly, consistent with the BoC’s announcement. The BoC joined other central bankers in pushing back against market bets that accommodation will need to be trimmed soon.

ASIA

This week’s regional calendar will reveal key China data, including February industrial output, retail sales and fixed investment. Japan’s top tier releases include the February trade report and national February CPI. Elsewhere, the usual mix of prices, employment and trade figures are due. For central banks, Japan’s BoJ ends its two-day meeting on Friday, with no changes to policy expected. Bank Indonesia meets, with no changes expected, leaving its 7-day reverse repo rate steady at 3.50%. Taiwan’s central bank should be on hold as well, with rates at 1.125%.

In China, February industrial output is due Monday, along with February retail sales and February fixed investment. The y/y data should be difficult to asses given the weakness from the pandemic seen last year. In Japan there will be a lot of attention on the BoJ meeting (Thursday, Friday). No policy changes are expected with the rate maintained at -0.1%. However, there could be some modest tweaks for a more flexible approach to the yield curve control policy after the recent policy review. BoJ Governor Kuroda said last week that the yield curve needs to remain “stably low.” January core machinery orders (Monday) are seen falling -4.0% m/m after rising 5.2% previously. This would break three straight monthly gains. Core orders bounced to an 11.8% y/y pace in December, erasing the -11.3% contraction rate in November. The January tertiary industry index (Monday) is penciled in sliding another -0.5% from -0.4% in December and -0.6% in November. Revised January industrial production is due Tuesday. The February trade report (Wednesday) should reveal a JPY 550.0 bln surplus versus the previous JPY 325.4 bln deficit. National February CPI (Friday) is expected to warm to -0.4% y/y from -0.6% overall, and rise to -0.4% y/y from -0.6% on a core basis.

India February WPI (Monday) is seen surging to 4.1% from 2.0% as rising demand and higher manufactured goods prices advance. The February trade report (Monday) is expected to see the deficit narrow to -$13.0 bln from -$14.5 bln. Taiwan’s central bank meets Wednesday, Thursday, with no change to its 1.125% discount rate expected. South Korea February unemployment (Wednesday) is forecast to drop to 4.7% from 5.4%, as the economy reopens following Covid restrictions. Indonesia February trade surplus (Monday) is forecast to widen to $2.3 bln from $2.0 bln. Bank Indonesia meets Thursday, and should keep its 7-day reverse repo rate steady at 3.50%. Hong Kong February unemployment (Tuesday) should remain steady at 7.0%, which is the highest seen since 2004. Singapore February non-oil exports (Wednesday) are estimated at up 4.0% y/y from up 12.8%.

In Australia, the minutes to the March RBA meeting are due Tuesday. The RBA left monetary policy unchanged, as had been widely anticipated and maintained guidance that the cash rate won’t be hiked until employment and inflation targets are met. Employment (Thursday) is seen expanding 30.0k in February after the 29.1k rise in January. The unemployment rate is projected to slip to 6.3% from 6.4%. The house price index (Tuesday) is expected to rise 2.0% in Q4 (q/q, sa) after the 0.8% gain in Q3. The preliminary figures for February retail sales will be released on Friday. Sales grew 0.5% in January and the February preliminary number is expected to be around 0.5% as well. RBA Assistant Governor speaks on “Small Businesses Finance in the Pandemic” (Wednesday). New Zealand’s Q4 GDP (Thursday) is expected to dip -0.2% (q/q, sa) after the 14.0% bounce in Q3. The current account (Wednesday) is projected to narrow to -NZ$3.0 bln in Q4 from -NZ$3.5 bln in Q3.

EUROPE

Eurozone: the ECB’s decision to step up the pace of asset purchases over the next months sent a clear signal to markets that the central bank will step in should reflation trades push up yields too much too quickly. Spreads in particular will be in focus and the central bank will make use of all the flexibility PEPP offers, with regard to the distribution of asset purchases across countries. The progress on the vaccination front meanwhile is still pretty slow and while there are cautious re-opening steps in Germany, governments are cautious ahead of the Easter holiday period, which is feared to lead to a renewed spike in cases if travel is not controlled. Still, with the central scenario a broad recovery from the second half of the year, yields are likely to continue to trend higher in coming months, although ECB action should help to limit volatility somewhat.

This week’s economic calendar is highlighted by German ZEW investor sentiment (Tuesday), which is expected to lift to 75.0 (median 74.0) from 71.2, boosted by vaccine progress and of course the record-quick passing of the U.S. stimulus bill. The ECB’s stepped up asset purchase program meanwhile should go some way to keep peripheral markets underpinned and slow down the ascent of yields, which is also a positive for stock markets, at least in the short run.

The final reading for Eurozone Consumer Price Inflation (Wednesday) is unlikely to bring a surprise and is expected to confirm the annual rate at 0.9% y/y, core at 1.1% y/y. The headline rate is still far below the ECB’s target and with the ECB focusing on peripheral markets and spreads, German rates are likely to continue to run above the Eurozone average for a while. There are some price pressures building in supply chains, which are stretched not just in the Eurozone, and we expect German PPI inflation (Friday) to jump to 2.1% y/y (median 2.0%) in the February reading. Still, as the ECB highlighted, wage pressures are likely to remain benign for some time to come and that should also keep a lid on medium term inflation trends.

Other data releases include the Eurozone trade balance for January, which we expect to have improved slightly. Trade with the U.K. has been hit by Brexit, although for January the impact seems to have been mainly on imports if German numbers are anything to go by. Stepped up stock-building ahead of the official Brexit date may have played a role — it remains to be seen how this works out in the medium term.

U.K.: the prospects for the UK economy to recover strongly continues to look good. The UK’s ahead-of-the-pack vaccination rollout, with about a third of adults, including those in the most at risk categories, having been vaccinated with at last one dose, along with sharply declining new case and mortality rates, suggest that the country is turning the pandemic corner. The government has so far enacted the first phase of a four stage reopening plan, with aim of completing this by mid June. One consideration ahead is that the UK economy may be impacted sooner, and possibly to a greater extent, by an unleashing of consumer spending of lockdown savings. Deutsche bank analysts estimated in a research piece last week that the anticipated consumer-spending contribution to GDP growth in 2021 could amount to 1.0% of GDP in the UK, which is about double that anticipated in BoE projections laid out in its February Monetary Policy Review. We concur with this view.

The pound, which is registering as the strongest of the main currencies on the year so far, is likely to retain an upward bias. The UK stock market is relatively densely packed with cyclical stocks, at least compared to the main U.S. indices, with the FTSE 100 dominated by financials, oil and gas companies, and miners. Cyclical stocks are widely expected to outperform tech stocks during the recovery-from-pandemic trade, which is inspiring a “great rotation” in portfolios. Less than 2% of stocks in the FTSE are tech stocks, compared to nearly 28% in the S&P 500.

With the data calendar quiet this week, the highlight will be the March BoE Monetary Policy Committee meeting (announcing Thursday). The ‘Old Lady’ is widely anticipated to leave policy unchanged by unanimous vote at the nine-member committee, which will leave the repo rate at its historic low of 0.10% and the QE total at GBP 875 bln. Some focus will be on the statement and minutes, though these aren’t likely to be too interesting so soon after last month revising its quarterly forecasts. Nonetheless, it will be interesting to see policymakers take on the transition afoot in markets — the spike in Gilt and global sovereign yields and the tumble and rotation in global stock markets. Most likely the guidance will be sanguine given the basis of improving global growth prospects, the effective Covid vaccination program in the UK, juxtaposed to the level of spare capacity in the domestic economy.

Switzerland: The Swiss data calendar is quiet, featuring trade and PPI data for February.

Stocks & ETF Watch List

Tip: Use this section to find stocks and ETFs to add value to your portfolio by increasing the alpha (return) and decreasing beta (beta). Our list is updated weekly to help provide our readers with timely insights. Readers should do their own research before making any investment.

Solid Picks

This group of stock/ETF picks is likely to experience growth and perform well into the near future. The “Fair Value” is a calculation using a discount cash flow analysis to determine the Intrinsic Value. The rank score of a stock, where a score of 1 is best. This algorithm compares a company to its peers and considers the consistency of key return metrics. Share Value is what they think the price per share should be. The overall score, which 99 is the best) is computed from the percentile rank of valuation, growth, financial strength, efficiency, momentum, and dividends. The score also considers the past performance of a stock in each of the component areas relative to peers.

Income Stock & ETFs Picks

This list of stocks and ETFs are selected for their ability to pay dividends. The dividend score of a stock, where a score of 99 is best. This algorithm compares a company to its peers and considers the consistency of key dividend metrics as well as their direction of change. The overall score, which 99 is the best) is computed from the percentile rank of valuation, growth, financial strength, efficiency, momentum, and dividends. The score also considers the past performance of a stock in each of the component areas relative to peers.

ETFs

Dogs of the Dow

This list of DOW stocks based on H. G. Schneider’s Article in the Journal of Finance in 1951 that used price-earnings ratio. The general idea is that blue-chip companies that pay a dividend are more likely to withstand an economic downturn. The dividend score of a stock, where a score of 99 is best. This algorithm compares a company to its peers and considers the consistency of key dividend metrics as well as their direction of change. The overall score, which 99 is the best) is computed from the percentile rank of valuation, growth, financial strength, efficiency, momentum, and dividends. The score also considers the past performance of a stock in each of the component areas relative to peers.

Economic Data Calendar

We have a heavy release schedule in the week of the March FOMC meeting. We expect a February pull-back in the retail sales headline and ex-auto measure after outsized January gains, while business inventories rise in January after a big December boost. We expect a February utility output surge to lift industrial production despite weather-hits to mining and manufacturing, while housing starts and permits also take a weather-hit. Trade prices should continue to climb rapidly, led by surging energy prices and a weak dollar. The Empire State and Philly Fed indexes should moderate to still-elevated levels in March, while the leading economic index likely fell modestly in February.

Week of March 15

The final passage of the $1.9 tln COVID Relief Bill prompted some adjustments to our March forecasts. We now expect a 24% March surge in personal income after the estimated -7.5% drop in February, followed by a -18% pull-back in April. The savings rate should spike to 30% in March, after the likely drop to the 13.7% area in February from the 20.5% peak in January, versus the prior stimulus-related spike to 33.7% in April of 2021. Consumer confidence should rise as stimulus payments are made, alongside the lift from vaccines and soaring stock prices.

Analysis of stimulus spending last spring suggested that the lion’s share of of the deposits were saved and not spent, and this should be even more true of the 2021 payments. Last Q2, much of the spending bounce reflected the reversal of lockdowns, and it’s hard to disentangle the two effects. We expect the Q1 savings rate to spike and then fall back to the downtrend we were previously projecting, leaving a savings rate by Q4 in the 9.4% area.

Beyond the income boost from stimulus distributions to households, with some temporary consumption lift, there should be little visible impact of the new stimulus bill on the quarterly GDP figures. The package will mostly prevent disruptions that would have occurred otherwise from expiring jobless benefits and state and local government spending cuts. What will be “seen” is the absence of government spending declines. Much of the money beyond these channels will be spent over the coming decade, and will not materially impact quarterly GDP figures.

Empire State/Philly Fed Index: 11.0/22.0

The Empire State index is assumed to slip to 11.0 in March from a 4-month high of 12.1 in February and a 7-month low of 3.5 in January, versus a 20-month high of 17.2 last July. The Philly Fed index is seen easing to 22.0 in March from 23.1 in February and an 11-month high of 26.5 in January. The diffusion indexes should remain elevated into Q2 as factory activity continues to ramp up in the facing of ongoing supply bottlenecks. Coronavirus vaccines are providing a lift through the current quarter, as are two rounds of stimulus payments in January and March. We have ongoing upward pressure on output from lean inventories, as demand has rebounded in many industries above pre-pandemic levels.

Retail/Ex-Auto Sales: -2.0%/-1.8%

We expect a -2.0% February retail sales headline drop with a -1.8% ex-autos decrease, following respective January jumps of 5.3% and 5.9%. We saw a 6.4% bounce for the CPI gasoline index that should provide a boost to service station sales. Unit vehicle sales eased to 15.7 mln in February from 16.6 mln in January, with a ongoing headwinds from semiconductor shortages that have kept vehicle inventories low. Sales were lifted sharply in January by stimulus deposits and vaccines, though we saw a big February headwind from the Texas freeze and cold weather across the midwest and east coast. Refund payments were delayed to the end of February, prompting an extra income hit, before an expected March income surge with the next round of stimulus checks. We expect continued strength in non-store sales, and a continuation of the rebound for sales of clothing, furniture, electronics, and appliances as we further reverse last year’s pandemic hit. Real consumer spending is expected to grow at a 4.0% rate in Q1 after a 2.4% growth clip in Q4.

Import/Export Price Index: 1.3%/1.1%

Import prices are estimated to rise 1.3% in February, with a 1.1% export price rise, after January gains of 1.4% imports and 2.5% for exports. We expect a big February boost from petroleum prices, alongside support from a big decline in the value of the dollar through the winter months. Ex-petroleum import prices are expected to grow 0.5%, while ex-agriculture export prices grow 1.1%. Oil prices have risen sharply through the turn of the year, with an extra-updraft in February from the Texas freeze that idled some production. The ongoing rebound in global production since the middle of last year has been associated with bottlenecks and shortages in many industries that have raised some prices, and the markets have focused on upside inflation surprises over the past two months.

Industrial Production: 0.2%

Industrial production is projected to rise 0.2% in February, after the 0.9% January headline increase. We saw January gains of 1.0% for manufacturing, and 2.3% for mining, but a -1.2% decline for utilities. In February, we expect a -0.3% manufacturing drop and a -2.0% decline for mining that are depressed by the Texas freeze. We expect a 5.5% jump for utilities due to frigid temperatures across a wide swath of the U.S. We expect the vehicle assembly rate to fall to 10.2 mln in February from 10.8 mln in January, as assemblies are being disrupted by semiconductor shortages. We saw a 0.1 mln trough pace in April, versus a 3.7 mln prior trough in January of 2009 that marked the start of the auto bankruptcies. Capacity utilization should rise to 75.7% from 75.6% in January. Industrial production expanded at a 10.0% clip in Q4, and we expect a 9.4% growth pace in Q1.

Business Inventories: 0.3%

Business inventories are estimated to rise 0.3% in January after a 0.9% (was 0.6%) December increase. Our forecast incorporates a 0.1% rise for factory inventories, alongside a 1.3% rise for wholesalers and a -0.6% drop for retailers. Sales should grow 4.0% in January, after a 1.1% rise in December. As-expected readings would result in the I/S ratio falling to 1.27 after five months at 1.32, versus an all-time high of 1.67 in April and a 1.47 peak from the last recession in both March of 2009 and December of 2008. Inventories in the Q4 GDP report showed a $48.0 bln accumulation rate that we expect will be lifted to the $71 bln area, after a -$3.7 bln liquidation in Q3 and a record -$287.0 bln pace in Q2. We expect a $62 bln accumulation rate in Q1 that subtracts -$9 bln from GDP growth. Inventories were already unwinding pre-COVID-19 as earlier tariff front running reversed course before the big Q2 hit, leaving room for the start of a protracted inventory rebound in Q4 of 2020.

Housing Starts: 1.450 mln

Housing starts are expected to dip to a 1.450 mln pace from 1.580 mln in January and a 14-year high of 1.680 mln in December, with a likely big hit from the winter storm, spiking mortgage rates, and surging building costs. Permits are expected to ease to 1.600 mln from a 14-year high of 1.886 mln in January. All the housing measures have rebounded sharply since Q2, before a pull-back in February. We saw 14-year highs for pending, new, and existing home sales in 2020, and a 12-year high for the MBA purchase index in mid-January. Before the pandemic, permits were already following a solid growth path that began in Q2 of 2019, fueled by low mortgage rates, and this strength has been exacerbated by the emerging migration of families to the suburbs. We expect a 1.537 mln average for starts in Q1, below the 14-year high 1.588 mln pace in Q4. We expect a 1.705 mln average for permits in Q1 that outpaces the 14-year high 1.628 mln average in Q4.

Initial Jobless Claims: 690k

Initial jobless claims for the BLS survey week of March 13 is expected to ease to a new expansion-low of 690k, after last week’s decline to 712k from a weather boosted 754k. The unwind of initial claims from the holiday peak has proven quite slow, as job churn likely remains high. Claims are expected to average 682k in March after averages of 788k in February, 852k in January, and 825k in December. The expected 690k BLS survey week reading follows prior survey week figures of 841k in February, 914k in January, and 892k in December. We assume a 500k March payroll rise after the 379k February gain.

Continuing claims fell by -287k to 4,144k in the week of February 27, following an upwardly revised 4,337k figure. We expect continuing claims to fall -144k to the 4,000k area for the week ending on March 6. We expect continuing claims to extend their downtrend through Q1. We expect continuing claims to fall -589k between the February and March BLS survey weeks. We saw prior drops of -366k in February, -537k in January, -767k in December, -1,734k in November, -4,924k in October, -1,745k in September, -2,459k in August, -2,280k in July, and -1,610k in June.

Leading Indicators: -0.2%

The leading economic index likely fell -0.2% in February due to a massive weather-hit, following increases of 0.5% in January, 0.4% in December, and 0.9% in November that extended the rebound from the huge pandemic drops of -6.3% in April and -7.5% in March of 2020. We expect continued uptrend across most components, but with big February weather hits to components like the workweek and permits.