Europe will likely be less of a factor in today's trading action
as the market's attention shifts to pressing domestic matters. Few
surprises are expected from the FOMC statement this afternoon at
the conclusion of the Fed's last meeting of the year. But this
morning's weaker than expected Retail Sales report puts a dampener
on rising expectations on the consumer spending front. The earnings
) will not help matters either.
We got a weaker than expected 0.2% increase in November Retail
Sales, after a 0.6% gain in October that was revised upwards from
the originally reported 0.5% increase. 'Core' Retail Sales, which
excludes automobile and gasoline sales data, also came in weaker
than expected. I don't think today's Retail Sales miss materially
damages the emerging narrative of recovering consumer spending, but
it is nevertheless disappointing.
The Retail Sales report is admittedly not a perfect proxy for
consumer spending since it only includes 'goods' sales at retail
establishments and leaves out the much bigger consumer outlays on
'services'. But it nevertheless provides valuable clues to trend in
consumer spending, which is the backbone of the U.S. economy.
Recent favorable trends in the labor market and improving consumer
confidence readings, coupled with the strong Thanksgiving weekend
sales numbers, had raised expectations for today's Retail Sales
report. This report is not only out of line with those readings,
but also partly reverses the positive Retail Sales momentum of the
last two months.
In corporate news, we got an earnings miss from
, as aggressive promotional efforts appear to have offset top-line
gains and weighed on the electronic retail giant's gross margins.
) provided same-store sales update for the fourth quarter that came
in above expectations. And
) announced Carin Stutz of Brinker international (
) as the company's new CEO.
are scheduled for release today at 10:00 AM EST and are expected to
increase by 0.8% after remaining unchanged in September.