Here we go- the inventory liquidation looks to be underway in earnest.

Again, sales also fell, so the inventory to sales ratio remains at a still very high 1.36%.

Look for more downward revisions to Q1 GDP:

Wholesale Trade
Wholesalers aggressively drew down their inventories in February, 0.5 percent lower following a revised 0.2 percent draw in January. Auto inventories were worked sharply lower in February, down 1.0 percent for the largest monthly decline since September 2013.

Sales in the wholesale sector fell 0.2 percent in the month for a 4th straight decline in a string that offers clear evidence of economic weakness. Yet the decline for inventories was greater than that for sales, making for an improvement in the stock-to-sales ratio which fell to a less heavy 1.36 from 1.37.

Auto sales have been struggling this year and the decline in wholesale auto inventories could be an early sign of correction for this industry. Still, draws are always welcome news when demand is soft. Note that today’s inventory decline and downward revision are negatives for first-quarter GDP estimates.

Can the economy grow faster than the sales of the S&P 500?

Weak U.S. earnings expectations set stage for stock gains

(Reuters) — Analysts expect profits of S&P 500 companies to be down 7.4 percent from a year ago, according to Reuters. The S&P 500 is trading at about 16.6 times its components’ earnings over the next 12 months. Roughly 80 percent of S&P companies that have already declared first-quarter results are beating expectations. Analysts started the year expecting a 2.3 percent increase in S&P 500 earnings. The drop in analysts’ views between Jan. 1 and now was almost triple the typical 3.5 percent preseason decline. S&P 500 sales are expected to have fallen just 1.2 percent in the quarter.

By FactSet’s count, first-quarter earnings are forecast to log a contraction of 8.5%, with energy companies garnering much of the blame. As recently as December, the S&P 500’s earnings-growth rate was projected to be slightly positive during the first quarter.

U.S. Apartment Market Shows Signs of Losing Steam

(WSJ) — The national vacancy rate, which has risen for three consecutive quarters, hit 4.5% in the first three months of the year, up from a recent low of 4.2% in the second quarter of 2015, according to market research firm Reis Inc. Average rents, meanwhile, increased by 4.1% to $1,248 in the first quarter from a year earlier, compared with the 2015 first quarter’s 5% increase, according to Axiometrics Inc. The number of occupied new apartments across the country climbed by just over 20,000 units in the first quarter, compared with the five-year average of about 40,000 for the quarter, according to apartment tracker MPF Research.

Rail Week Ending 02 April 2016: March Totals Down 11 Percent From One Year Ago

Week 13 of 2016 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. All rolling averages are in decline.