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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

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