Last Week:

Markets surge upward. There was one positive last week: no government shutdown. There was one rumor: hope that trade talks with China would go well. There was one negative: December retail sales. Markets ignored the bad news, grabbed the rumor and had a big week.

December’s retail sales came in lower that expected. Consensus was for growth of +0.1%, but the number came in at -1.2%. In many cases data was delayed due to the government shutdown. Retail sales has been one of those delayed data points. We were supposed to get the January number last Friday, but last Thursday we just got the December number.

The consumer price index was flat for January. The actual number was 0 inflation. Year-over-year inflation is at +1.6%. Take out food and energy costs, inflation is at +2.2%.

Wholesale price inflation came in at +0.2% for January.

The industrial production number missed the consensus of +0.1%, coming in at -0.6%.

My model’s status: Speed #1 remains positive. Speed 2 is just barley positive, Speed 3 is at transition (upward); while 4 and 5 still remain down.

This Week:

The focus of the week: Minutes from the last Fed meetingin January will be released on Wednesday afternoon. The Fed has become very “dovish” since the first of the year. Will the minutes reveal anything new?

U.S. markets will be closed on Monday, in observance of President’s Day.

Earnings season is underway. Some of the important companies reporting this week: Kraft Heinz, Nordson, Southern Co, Timken Steel, and Walmart.

Indicator focus:  December’s durable goods order, January’s existing home sales, and February’s Philly Fed report (Thu).

Have a great week.


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