The Fiscal Times advises that the “the housing market is about to perk up.” One of the reasons for the optimistic outlook, we’re told, is the recent rebound in sales. This upbeat forecast is due for a stress test this week with the monthly releases on sales of existing homes (scheduled for later today at 10am eastern) and tomorrow’s report on new home sales. The stakes are higher than usual in the wake of recent economic reports that point to a sharp slowdown in US growth in the first quarter.
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● Greek bank shares slide as ECB considers pulling the plug | Telegraph
● Greek finance minister: Differences Narrowing in Creditor Talks | Bloomberg
● Italy retail sales dip in Feb; disappointing 0.1% y-o-y rise | Istat
● Italy Industrial Orders Rise In February | RTT
● Bank of England unanimous on rates, more upbeat on Eurozone | Reuters
● China Suffers First Default by State-Owned Company | WSJ
● UK trader in fraud arrest over US ‘flash crash’ | BBC

The March report of the Chicago Fed National Activity Index reaffirms what’s been obvious for some time: US economic activity in this year’s first quarter has been soft. It’s premature to interpret the slowdown as anything more than another bump in an otherwise challenged and ongoing recovery. That, at least, seems to be the message via Treasury yields.
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● US Economic Activity In March Brakes Hard As Manufacturing Weighs | IBD
● The U.S. Economy Keeps Disappointing | Bloomberg
● Fed’s Bill Dudley: alert to global liquidity storm, yet signals 3.5% rates | Telegraph
● ZEW: German economic outlook index dips in Apr–1st time since Oct 2014 | ZEW
● ZEW: Eurozone economic outlook index ticks higher in April | ZEW
● Hopes of Greek Riga deal fade | Reuters

Economic activity in March slumped to the softest pace in 31 months, according to this morning’s update of the Chicago Fed National Activity Index. The three-month moving average of this business cycle benchmark (CFNAI-MA3) decreased to -0.27 last month from February’s -0.12 reading. Last month’s estimate is the lowest since Aug. 2012 for the CFNAI-MA3 data and another sign that the macro trend for the US has suffered in this year’s first quarter. Using this index as a guide, economic activity is well below the historical trend (i.e., below zero).
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The unusually wide spread at the outer edges for the trailing performances of the major asset classes via our standard set of ETF proxies has been squeezed a bit. The compression is due mostly to recent weakness in US real estate investment trusts (REITs). Securitized real estate is still in the lead for the trailing one-year period (250 trading days) through Friday (Apr. 17), but the performance advantage has been pared in recent weeks. The Vanguard REIT (VNQ) is ahead by nearly 18% for the past year, but that’s well down from the nearly 30% surge for that trailing period in last month’s update.
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● US leading indicator points to slower growth | Reuters
● US consumer sentiment rises in April | Reuters
● US Consumer Prices Tick Up, in Latest Sign of Emerging Inflation | WSJ
● China’s central bank enters stimulus mode | CNN
● China bank move stokes global worry | Sydney Morning Herald
● Eurozone upturn likely to boost UK economic growth, says new report | Guardian

● Dealing with China: An Insider Unmasks the New Economic Superpower
By Henry M. Paulson
Interview with author on CNBC
Former Treasury Secretary Hank Paulson said Wednesday the growth model powering China’s economy is running out of steam. Paulson, author of the new book “Dealing With China: An Insider Unmasks the New Economic Superpower,” said in an interview on CNBC’s “Squawk Box” that the world’s second-largest economy is too reliant on exports and municipal debt to build infrastructure.
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The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to increase slightly to -0.07 in the March update that’s scheduled for Monday (Apr. 20), based on The Capital Spectator’s median point forecast for several econometric estimates. The projection is incrementally above the -0.08 reading for February, which reflected a a mildly below-average pace of economic growth for the US relative to the historical trend. Only negative values below -0.70 indicate an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for March as a guide, CFNAI’s three-month average is expected to remain at a rate of growth that’s slightly below the historical trend.
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US economic growth slowed in this year’s first quarter, perhaps to the point that the quarterly change for Q1 GDP will be flat in the Commerce Department’s “advance” estimate that’s scheduled for release on Apr. 29. From a business cycle perspective, however, the recent deceleration is modest so far. Indeed, there’s still a high degree of forward momentum in the macro trend based on the numbers in hand. Yes, the tide has turned, but moderately so and after a period of relatively strong growth.
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