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 and gasoline.
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
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.
are scheduled for release today at 10:00 AM EST and are expected
to increase by 0.2% after increasing by 0.3% in November.
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