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Tag: retail sales

  • Retail Sales’ Strong Beat

    Retail sales came in roughly double the Street’s estimates at 0.7% versus consensus of 0.3-0.4%. Ex-auto was just as strong: 1.1% versus 0.5% consensus. Combined with an Empire State Manufacturing index disappointment of -14.3 versus -6.0 expected, futures sold off for all of 30 seconds or so before rebounding to higher highs.

    The retail sales print, like much of the recent data, further reduces the odds of substantial rate cuts in 2024. Yet, as is often the case, the algos ignored the data and focused instead on several of their favorite factors: VIX, currencies and SPX’s bounce off its 50-day moving average.

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  • PPI Comes in Hot, Too

    February PPI came in at twice expectations: 0.6% versus 0.3%.  In a replay of the CPI print, stocks dipped for a few seconds before resuming their overnight ramp as algos were more focused on VIX dropping through its 50-DMA just in time for OPEX.

    VIX did pop above the 50-DMA…for several seconds. It got better.Indicators such as RSI still remain on edge.continued for members… (more…)

  • Retail Sales Warn of Economic Woes

    Retail sales plunged 0.8% in January, far below estimates of -0.2% and last month’s +0.4%. The miss can’t be attributed solely to seasonality, as the Jan 2023 print was a massive +3.7% gain. The annual gain from Jan 2024 was a meager 0.6%.

    It has been a tough week for economic data. Inflation higher than expected and retail sales much lower than expected – sounds like a recipe for stagflation. With the UK officially sliding into recession, can the US be far behind?

    Futures have given up some of their slight overnight gains.

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  • All Eyes on CPI

    This is one of the biggest weeks for economic data in quite some time. We get October CPI tomorrow, PPI and retail sales on Wednesday, initial claims on Thursday, and housing starts and permits on Friday.  Of all these data, CPI looms largest for the markets.

    Recall that September core CPI came in at 4.1% YoY, with shelter (+7.2% YoY) accounting for over 70% of the increase. With the recent sharp drop in mortgage rates, shelter could remain stubbornly high, complicating the Fed’s inflation fighting efforts and thus paring the market’s optimism.

    Futures are off moderately in advance of tomorrow’s data after nailing our channel top target.

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  • Blowout Retail Sales Nudge Rates Higher

    We’ve stuck stubbornly to our forecast for the 10Y to reach 4.75 for nearly a year, betting that sticky inflation would force the Fed’s hand. We came within 6 bps of new highs this morning after retail sales soared 0.7% (expected 0.4%) in July.

    Futures held on to their lows, though the pre-opening shenanigans haven’t yet begun (keep a close eye on DXY and VIX.) We don’t expect the bulls to give up SPX’s 50-day (4443.43) without a fight.

    The challenge for bears now, as back in October 2022 when the 10Y tagged our 4.26 target [see: More OPEX Games] is that we’re up against OPEX (Friday.)  Back then, it meant the 10Y’s channel collapsed and the next leg higher was postponed until after equities’ year-end run for the barn. If TPTB have their way, SPX’s 50-day backtest would be a springboard for a nice bounce.

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  • Retail Sales Miss

    April retail sales came in at 0.4% versus expectations of 0.8%, underscoring the notion that the economy isn’t nearly as strong as the market would have you believe. Futures, already off slightly, have added to their losses.

    It remains to be seen, however, whether the propping up of equities in advance of OPEX and the debt ceiling debacle can be derailed.

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