Back to top

Image: Bigstock

Retail Sales Fall -0.7%; Big Banks Report Q4: JPM, C, WFC

Read MoreHide Full Article

Friday, January 15, 2021

This Friday prior to a three-day weekend for the stock market (closed Monday in observance of Martin Luther King’s birthday), we see a plethora of economic and earnings data: Retail Sales, Producer Price Index, Empire State and Big Bank Earnings have all hit the tape. And this is just for starters.

Retail Sales plummeted in the month of December. Coming in at -0.7%, Retail Sales were better than the downwardly revised -1.4% reported for November, but way off the -0.1% expected. The numbers get worse when you start stripping away volatile items: ex-Autos doubled the headline miss to -1.4% (-0.4% expected), while ex-Autos & Gas came in at -2.1%. The Control number, which gets entered into all sorts of other economic projections, was -1.9% last month — the heart of holiday shopping season, no less — almost four times lower than the -0.5% in November and the worst read since April’s all-time low -12.4%.

The December Producer Price Index (PPI) was a tad shy of estimates: +0.3% from +0.4% consensus, though an improvement from the previous month’s +0.1%. Ex-food & energy was also +0.1%, half of what was expected, and +0.8% year over year. Compared to its sister-metric Consumer Price Index (CPI), which brought in-line actuals, these figures this morning are a tad disappointing, though not as bad as Retail Sales for last month.

The Empire State Index for January continued to stair-step lower, to +3.5 from expectations of 6.0. Going back the past three months, we see 4.9 for December, 6.3 for November and 10.3 in October. In other words, a steady climb down in productivity for the fourth-largest U.S. state by population. Today’s 3.5 is also lower than the 3.7 reported last August, and the worst month since the last negative read back in June.

All of these reports show an economy thirsting for new stimulus. With a new $1.9 trillion relief plan being proposed by the incoming Biden administration, perhaps this will be just what the doctor ordered. (In the near term, that is. There will still be the matter of how it’s going to be paid for.)

Industrial Production for December put up a solid positive number: +1.6% from the +0.5% expected and +0.4% originally reported the previous month. This demonstrates a growing and healthier Manufacturing sector, which lately has done more heavy lifting than the Services sector, especially this late into the Covid-19 pandemic.

Capacity Utilization also surprised to the upside: 74.5% from the upwardly revised 74.0% from the previous month. This is another positive arrow in the quiver for the Manufacturing side; factories at higher capacity utilization ought to improve other productivity metrics.

Zacks Rank #1 (Strong Buy)-rated JPMorgan (JPM - Free Report) put up a big beat on its bottom line earnings this morning, reporting $3.07 per share versus the $2.72 per share in the Zacks consensus. Revenues of $29.22 billion were slightly lower than the $29.28 billion our analysts were expecting, but demonstrates growth from the $28.29 billion from the year-ago quarter. Mortgage fees and related income blossomed 60% year over year in the quarter, while Investment Banking Fees gained 40% from the year-ago quarter. For more on JPM’s earnings, click here.

Citigroup (C - Free Report) also posted mixed results for its Q4 this morning, $2.07 per share versus $1.35 expected (from $1.90 per share a year ago), while $16.50 billion in revenues was 0.5% short of the Zacks consensus (and down from the $18.38 billion in Q419). Wells Fargo (WFC - Free Report) posted 64 cents per share against 59 cents anticipated, while $17.93 billion missed expectations by 0.53%.

For more on C’s earnings, click here.

For more on WFC’s earnings, click here.

Questions or comments about this article and/or its author? Click here>>

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

The full Ahead Of Wall Street article

JPMorgan Chase & Co. (JPM) - free report >>

Citigroup Inc. (C) - free report >>

Wells Fargo & Company (WFC) - free report >>