The always important retail sales numbers (both core and headline) showed a respectable 0.3% increase in January. This should be compared against an expected 0.4% decrease in headline sales and an expected 0.2% increase in core sales (sales excluding volatile auto purchases).
Retail sales are up 3.0% from January 2007, and up 4.9% from January 2007 excluding autos.
Also, the biggest decline came in building materials, which is a sign of weakness in home building. Everyone already knows home building is weak. What is key is that the weakness did not show up broadly in consumption items, though some economists were a bit reserved because the numbers did show a modest shift away from discretionary towards non-discretionary spending. For example, people were leaving bigger ticket items like dishwashers on the shelf while continuing to scoop up smaller purchases.
What does all this mean for MII? It means that that news of the consumer’s death has been exaggerated. It suggests we have not already entered a recession. It also undermines the theory that we are destined to enter a recession.
The result? The markets, and MII's portfolio, are up.
ALSO: Since last Thursday's HF meeting, where we agreed to hold onto SLB and AAPL despite seeing some unrealized losses, we have seen both of those stocks rebound significantly. SLB is up from 74 to 84; AAPL is up from 120 to 127. Let's stick with long-term investing based on our understanding of market and economy fundamentals.
Retail sales are up 3.0% from January 2007, and up 4.9% from January 2007 excluding autos.
Also, the biggest decline came in building materials, which is a sign of weakness in home building. Everyone already knows home building is weak. What is key is that the weakness did not show up broadly in consumption items, though some economists were a bit reserved because the numbers did show a modest shift away from discretionary towards non-discretionary spending. For example, people were leaving bigger ticket items like dishwashers on the shelf while continuing to scoop up smaller purchases.
What does all this mean for MII? It means that that news of the consumer’s death has been exaggerated. It suggests we have not already entered a recession. It also undermines the theory that we are destined to enter a recession.
The result? The markets, and MII's portfolio, are up.
ALSO: Since last Thursday's HF meeting, where we agreed to hold onto SLB and AAPL despite seeing some unrealized losses, we have seen both of those stocks rebound significantly. SLB is up from 74 to 84; AAPL is up from 120 to 127. Let's stick with long-term investing based on our understanding of market and economy fundamentals.
Update: Mark Perry gives us the graph at the top of this post with this analysis- The chart above...shows annual retail sales growth rates, from the same month in the previous year, and averaged over six months to smooth the data. Notice that the trend over the last 9 months is upward, and it looks nothing like the downward trend in 2001-2002 during and following the last recession (shaded in graph).
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1 comment:
A very very small gain indeed.
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