Market Beats | US Retail Sales Miss Forecast; US Homebuilder Sentiment Drops to 7-month Low; York State Factory Activity Shrinks; Forever 21 Files for Bankruptcy Again; Harvard Extends Tuition-Free Policy to More Families; Berkshire Increases Stakes in Five Japanese Trading Houses

—— US Retail Sales Miss Forecast; US Homebuilder Sentiment Drops to 7-month Low; York State Factory Activity Shrinks; Forever 21 Files for Bankruptcy Again; Harvard Extends Tuition-Free Policy to More Families; Berkshire Increases Stakes in Five Japanese Trading Houses

1. US Retail Sales Miss Forecast

US retail sales posted a modest gain in February—rising just 0.2%—and January’s figures were revised to show a steeper decline, stoking concerns about a potential slowdown in consumer spending.

Data from the Commerce Department released Monday indicates that while February saw a 0.2% uptick in the nominal value of retail purchases, January’s sales were adjusted to a 1.2% drop, the largest fall since July 2021.

The report, which primarily covers spending on goods, comes at a time when President Donald Trump’s tariffs on a wide range of imports from major trading partners are expected to push prices higher. This backdrop has led economists to revise downward their growth estimates.

Of the 13 categories reported, seven registered declines. Notably, motor vehicle sales—anticipated to rebound from a weak January—fell, as did gasoline, electronics, and apparel sales. Spending in the only service-sector category, restaurants and bars, declined by the largest margin in a year.

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2. US Homebuilder Sentiment Drops to 7-month Low

Confidence among U.S. homebuilders has declined this month to its lowest level since August, impacted by concerns over tariffs, rising construction costs, and economic uncertainty as the spring selling season approaches.

The National Association of Home Builders (NAHB) and Wells Fargo reported that their housing market index dropped by three points to 39 in March, a figure that was below all predictions in a Bloomberg survey of economists.

Specifically, the index components that measure current sales of single-family homes and prospective buyer traffic have fallen to their lowest points since late 2023. However, the gauge of homebuilders’ expectations for the next six months remained steady at 47.

NAHB Chairman Buddy Hughes, a builder and developer based in Lexington, North Carolina, highlighted several challenges facing builders. “Builders continue to face elevated building material costs that are exacerbated by tariff issues, as well as other supply-side challenges that include labor and lot shortages,” he said.

This cautious sentiment marks a shift from the initial optimism that followed President Donald Trump’s election, which was spurred by his promises to reduce regulations and foster economic growth.

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3. New York State Factory Activity Shrinks

Manufacturing activity in New York state plummeted in March to its lowest level since early 2024, while indicators for prices have surged, aligning with projections of decelerated growth and accelerated inflation due to the implementation of tariffs.

The Federal Reserve Bank of New York reported that its manufacturing index dropped sharply by nearly 26 points to a reading of minus 20. Simultaneously, the prices paid index climbed to 44.9, marking a two-year high. Prices received by manufacturers also rose to the highest level since 2023.

The new orders index experienced a significant decline, falling more than 26 points, which is the largest drop since May 2023. Additionally, there was a marked decrease in shipments, and both employment metrics and the length of the workweek contracted at a quicker pace than in the previous month.

This downturn in factory activity highlights the challenges faced by the manufacturing sector, which is struggling to gain momentum amid policy uncertainties. The tariffs introduced by the Trump administration are anticipated to further suppress growth and contribute to rising inflation.

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4. Forever 21 Files for Bankruptcy Again

Forever 21’s US retail operator, F21 Opco, has filed for Chapter 11 bankruptcy protection for the second time, amid challenges such as rising inflation and intense competition in the fast-fashion industry.

Since the 1980s, Forever 21 has been a popular destination for young women seeking affordable, trendy clothing. However, recent years have seen the company grappling with increasing costs for inventory and wages. Additionally, the rise of online fast-fashion competitors like Temu and Shein has intensified the pressure, contributing to the company’s financial difficulties.

Despite efforts to cut costs, these initiatives were insufficient to offset significant financial losses. Consequently, F21 Opco has entered bankruptcy in Delaware, reporting approximately $1.58 billion in total funded debt, according to the court filings. It’s important to note that Forever 21 stores outside the United States are not affected by this filing as they are operated by different licensees.

The Forever 21 trademark and other intellectual property are owned by Authentic Brands, a major player in the apparel and lifestyle industry. Authentic Brands licenses these assets to the operating companies, including F21 Opco.

Following the Chapter 11 filing, Authentic Brands will retain ownership of the intellectual property and has the option to license the Forever 21 brand to other operators if necessary, ensuring the brand can potentially continue under new management or structure.

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5. Harvard Extends Tuition-Free Policy to More Families

Harvard University has announced a significant expansion of its financial aid program, eliminating tuition fees for students from families with annual incomes of $200,000 or less. This move aims to increase accessibility to the prestigious institution amid growing scrutiny of elite universities by the White House and lawmakers.

Under the new plan, Harvard, known as the oldest and wealthiest college in the U.S., will offer free tuition, room, and board for families earning $100,000 or less. Those within the $200,000 income bracket will not be required to pay tuition fees. The policy change was revealed in a statement released on Monday.

This announcement follows similar initiatives by other leading institutions such as the University of Pennsylvania and the Massachusetts Institute of Technology, as part of a broader effort to enhance affordability. The cost of attending many top-tier colleges now exceeds $90,000 annually, putting a significant financial strain on many families.

Harvard President Alan Garber commented on the initiative, stating, “Putting Harvard within financial reach for more individuals widens the array of backgrounds, experiences, and perspectives that all of our students encounter, fostering their intellectual and personal growth.”

Set to begin in the 2025-26 academic year, the revised financial aid program will make approximately 86% of U.S. families eligible for some form of aid at Harvard College, significantly increasing from the current cap, which offers free tuition to families earning up to $85,000.

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6. Berkshire Increases Stakes in Five Japanese Trading Houses

Warren Buffett’s Berkshire Hathaway has increased its investments in the top five trading houses in Japan, lifting its stakes after successfully negotiating the removal of a 10% investment ceiling. The investment gains were notable in Mitsubishi Corporation, where Berkshire’s holdings went from 8.31% to 9.67%, and in Mitsui, where its stake rose from 8.09% to 9.82%. Similar increases occurred in Itochu, Marubeni, and Sumitomo Corporation, each seeing a rise of about a percentage point.

These trading houses play a crucial role in Japan’s economy, serving as key importers of essential raw materials such as oil, gas, iron ore, and copper, while also supporting the nation’s major export sectors including automobiles, electronics, and machinery.

Buffett, who initially revealed Berkshire’s investments in these companies in 2020, expressed growing admiration for them in his recent annual shareholder letter. He commended their business operations for their resemblance to Berkshire Hathaway, which itself evolved from a textiles manufacturer to a vast investment conglomerate.

Buffett also indicated his intention to maintain these investments for “many decades,” underscoring his long-term commitment to these Japanese firms.

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7. Congestion Pricing Gains More Support from New Yorkers

New York City’s contentious congestion pricing program is slowly winning over support, though it still hasn’t secured a majority of voter approval.

The program, which launched on January 5, charges most drivers $9 during peak hours to enter Manhattan south of 60th Street. Its goals are twofold: reduce traffic congestion and generate revenue to upgrade the city’s over-a-century-old transit system.

According to a recent Siena College poll of registered voters statewide, 40% believe the fee should be eliminated—mirroring the Trump administration’s push—while 33% support keeping the program in place. This marks a modest shift from a December poll, where opposition was at 51% compared to just 29% in favor.

Among New York City residents specifically, attitudes have notably reversed. Now, 42% say the toll should remain, while 35% want it scrapped, compared to December figures showing only 32% in support and 56% opposed.

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