A day after the Fed came out with a fresh bond-purchase
program, we have a coordinated easing action from global central
banks and a flood of favorable looking economic data this
morning. On the data front, we have neutral-looking data on
Retail Sales and wholesale inflation and better than expected
numbers on the Jobless Claims front. All of this very market
friendly, but it may not amount to much in the absence of
the 'Fiscal Cliff' resolution.
Jobless Claims dropped a bigger than expected 29K last week to
343K. The four-week average, which smoothes out the week-to-week
volatility, dropped by 27K to 381.5K. The Jobless Claims numbers
have shaken off the Sandy effects and have now gone below
pre-Sandy levels (it was in the 360K vicinity before the storm).
This level of claims data, if sustained over the coming weeks,
will be indicative of a notable positive momentum in the labor
market. Hard to tell at this stage how sustainable this trend
will turn out to be, but it nevertheless shows that the
persistent downtrend in corporate capital spending has not
carried into hiring decisions.
The Retail Sales data this morning came in weaker than
expected on the 'headline', but the growth number excluding
gasoline and automobile came in better than expected. The notable
gains (in the ex-gasoline/auto category) were for non-store
retailers, which primarily includes online merchants. This
confirms the positive secular movement of consumer spending
dollars to the web that online-only merchants like
) have been cashing for a while. In fact, many traditional brick
and mortar retailers like
) have been making concerted online pushes this holiday season.
As such, while overall holiday spending this year appears to be
comparable to trends last year, growth on the online front
appears to be better than last year. Another positive in this
morning's November Retail Sales data is the drop in gasoline
sales, primarily a function of lower prices.
There is a lot of economic data this morning, but the 'Fiscal
Cliff' issue still remains unresolved. Some have started
indicating that the issue may not get resolved before Christmas.
To many of us the broad outlines of a deal are right in front of
us, but somehow the leaders can't seem to grasp it.
are scheduled for release today at 10:00 AM EST and are expected
to increase by 0.3% after increasing by 0.7% in September.
To read this article on Zacks.com click here.