Market Commentary

Retail Sales and Industrial Production

These were the only two important reports, besides the continued low inflation reports, out this week. We have been in a low inflation period for so long it no longer is talked about. That could be a mistake. However, this week retail sales for January came in at .3% growth. It was broad based and up from the .2% the month before. Oil prices fell so consumers opened their wallets for other goods and services beside gasoline. When you remove the expensive auto sales, overall retail sales were still up .3%. That is a good number.

Industrial production did not look as good. For January it was down .3% on top of being down .4% the month before. The discontinued production of the 737 Max 8 jet was blamed but maybe we are also seeing the beginnings of the effect of the Coronavirus in China. The supply chain is being disrupted around the world because of what is happening in China. This might be a short term problem, but it will affect industrial production everywhere in the world.

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