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Market Bull

Retail Sales Plunge

Retail Sales Plunge
The Market Bull 2019

 
 
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The Market Bull – February 14, 2019

The major averages finished the day about even despite some fairly significant disappointing economic data. Rumors continue to swirl on averting another government shutdown and a resolution to the trade war with China before the tariffs jump to 25%, but I’ll believe it when I actually see it.

Retail sales cratered in December falling 1.2%, the largest monthly drop in 10-years, blowing expectations out of the water that called for a small decline of just .1%.

Declines were very broad based as just building materials, motor vehicles and parts were the only sectors to show any sales growth for the month. On a year ago basis sales advanced an anemic 2.3%. One month does not make a trend but as retail sales, aka consumer spending, make up about 70% of total economic activity it most certainly is cause for concern.

The January Producer Price Index or PPI slipped .1% for the month, pushing the year ago rate down to just 2%. On large declines in energy costs.

European industrial production went sharply negative as 2018 came to a close suggesting that if a recession isn’t already a reality, it will most likely become one very soon.

Real hourly earnings increased .2% in December and 1.6% for the year.

A rather tepid rate of increase especially when one considers how robust the jobs market is based on the official 4% unemployment rate.

Standard and Poors 500 Index closed at: 2,745.73 down 7.30
NASDAQ finished the day: 7,426.95 up 6.58
Gold ended trading at: $1,315.40 up $.30

Is The Fed Trapped

The Fed pauses on interest rates and looks to halt its Quantitative Tightening process as well. Has it realized that it has painted itself into a corner?

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Crash Out Brexit?

Markets finish the day mixed. Trumps tax cut is so far another debt laden bust. Case/Schiller reports higher home prices, but momentum slows again.

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Markets Spooked

Markets slip to begin the week on earnings misses. Chicago Fed gains in January. Dallas Fed back in the black to finish the year.

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Markets Mixed

Kansas City Fed gains in January. Initial claims for unemployment hit a 50-year low of 199,000. Chemical activity barometer falls .3% in January.

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Volatile Trade

Another volatile day as the country flounders with its political fiasco while the economy circles the drain. Mortgage activity slips. Richmond Fed negative again.

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Sharp Losses

Existing home sales miss big in December. Trumps tax cuts cost way more than estimated. Major averages fall hard to begin the week.

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Another Big Week

The major averages close another strong week, S&P 500 Index +3.53%, NASDAQ +3.26%. Industrial production gains .3%. Consumer sentiment slips.

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Drop The Tariffs

Stocks shoot higher late on rumors of a trade war cease fire. Philadelphia Fed gains in January. European auto sales tumble late, finish 2018 about even.

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Trade Prices Slip

Stocks finish with modest gains. Mortgage activity jumps again. Beige Book more modest growth, some risks. Trade prices slip for a second month.

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Brexit Vote Fails

Markets close with large gains despite generally disappointing data. The Brexit vote fails badly. Chinese auto sales fall again. December PPI just 2.4%.

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Caleb Lawrence

Registered Investment Adviser

5321 Scotts Valley Drive
Suite #202
Scotts Valley, CA 95066

Local: (831) 334-5318

After nearly 19 years of live radio it was time to move on to new projects. My daily economic update can still be found on my Blog and the I-Tunes and Google Play stores as a podcast. Or you can call my office 831-334-5318 and take advantage of my still “free” after 20+ years initial consultation.  Usually about an hour, will have an opportunity to get to know each other better and address your specific concerns on a one to one basis.