Wednesday, February 13, 2013
A good enough January Retail Sales report and the
) deal announcement should help stocks maintain the overall
positive bias. But the gains will likely be modest given the
dearth of stronger catalysts today, particularly given the
stronger year-to-date gains.
The January Retail Sales data did not show that the payroll tax
hike resulting from the Fiscal Cliff deal had any negative impact
on consumer spending. The data came in in-line with expectations
on the 'headline,' a tad bit better than expected excluding
autos, and shade weaker relative to expectations excluding autos
Consumer spending was very strong at +2.2% annualized pace in
the advanced fourth quarter GDP report and the concern has been
that the fourth quarter momentum may not be sustainable in the
current period due to the tax issue.
We didn't see that happen in today's report, though the part of
the Retail Sales report that feeds into GDP calculation
(excluding autos, gasoline, and building materials) came in
weaker than expected. But this doesn't mean the tax hike wouldn't
have any negative impact on consumer spending.
We didn't see any pronounced negative effects in January, but
it is not unreasonable to expect the tax effects to show up over
a number of months. On balance, this report indicates that
subsequent revisions to the fourth quarter consumer spending
number will most likely be modestly positive and that the
favorable momentum from the fourth quarter has carried into the
COMCAST CORP A (CMCSA): Free Stock Analysis
DEERE & CO (DE): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
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In corporate news, we got better than expected fourth quarter
Deere & Co
) this morning and a major announcement from Comcast where the
cable giant acquired the remaining 49% of NBC Universal from
) for $16.7 billion. The Comcast deal was not expected to take
place for another year, so the earlier announcement represents a
major bet on the TV business.
Director of Research