“Trade the market you got, NOT the one you wish you got” — LP

1. Retail sales rise 0.6% in December, topping expectations for holiday shopping — Retail sales increased 0.6% for the month, buoyed by a pickup in clothing and accessory stores as well as online nonstore businesses. The results were better than the 0.4% Dow Jones estimate. Excluding autos, sales rose 0.4%, which also topped the 0.2% estimate. On a year-over-year basis, retail sales ended 2023 up 5.6%. The numbers are not adjusted for inflation, so sales show that consumers are more than keeping up with an annual inflation rate of 3.4% as measured by the consumer price index. The CPI increased 0.3% in December, also lower than the retail sales increase.
Another measure of retail sales strength that excludes sales from auto dealers, building materials stores, gas stations, office suppliers, mobile homes and tobacco stores rose 0.8% for the month. The Commerce Department uses this so-called control group when computing gross domestic product.
2. Congress Passes Bill Keeping Government Open as Border, Spending Fights Rage — Congress cleared legislation extending government funding into March, a step that ensures federal workers will remain on the job but does nothing to alleviate underlying political pressures stemming from high U.S. debt levels, record crossings at the southern border and an enduring war in Ukraine. The Senate easily passed the measure 77 to 18, followed by the House, which approved the bill 314 to 108, sending it to President Biden’s desk with time to spare ahead of the weekend deadline. In a replay of recent votes that underscore the fragility of the GOP majority, House Speaker Mike Johnson (R., La.) relied heavily on Democrats to bring the continuing resolution across the finish line, with almost half of Republicans declining to back the measure. Thursday’s bill provides funding for the Transportation Department, the Energy Department, Agriculture Department, the Food and Drug Administration, and Veterans Affairs and military construction through March 1. The rest of the government would be funded through March 8. Under current law, funding was set to run out on Jan. 19 and Feb. 2, respectively.
3. December home sales slump to close out worst year since 1995 — Sales of previously owned homes fell 1% in December compared with November to a seasonally adjusted annualized rate of 3.78 million units, according to the National Association of Realtors. Sales were 6.2% lower than in December 2022, marking the lowest level since August 2010. Full-year sales for 2023 came in at 4.09 million units, the lowest tally since 1995.Regionally, on a month-to-month basis, sales were unchanged in the Northeast and fell 4.3% in the Midwest. Sales were down 2.8% in the South but rebounded 7.8% in the West. On a year-over-year basis, sales were lower in all regions.
4. US Consumer Sentiment Jumps, Price Outlook Hits Three-Year Low — Consumer sentiment surged 29% since November, the biggest two-month increase since 1991, the University of Michigan reported, adding to gauges showing improving moods. It’s a sharp turn after persistently high inflation, the lingering shock from the pandemic’s destruction and fears that a recession was around the corner had put a damper on feelings about the economy in recent years, despite solid growth and consistent hiring. Consumer sentiment leapt 13% in the first half of January from December, the Michigan survey said, after a sharp rise the prior month. The pickup in sentiment was broad-based, spanning consumers of different age, income, education and geography.

Market made a new high this week. History sides with further gains ahead. The S&P 500 went 512 trading days without a record through Thursday, which ranks as the sixth-longest streak since 1928, according to Ed Clissold, chief US strategist at Ned Davis Research. One year after hitting new highs, the index has risen 13 out of 14 times by a median of 13% in that span.
Below is the research from Ned Davis Research showing the stats on first new high after 1 year bullish going fowrard, on average:

The week ahead — Economic data from Econoday.com:

This entry was posted on Wednesday, January 24th, 2024 at 5:14 pm and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.