Friday, February 14, 2025
Pre-market futures are Valentine red this morning, but despite a mid-week drop, may still possibly finish the week in the green (all but the small-cap Russell 2000, that is). We see plenty of economic data hitting the tape at this hour, but none of it seems to be moving index levels. The Dow is -100 points at this hour, the S&P 500 is -5 and the Nasdaq -17 points. The Russell is actually +2 points currently.
The Dow has closed four of its past five sessions in positive territory, while the S&P is only a couple dozen points below all-time highs three weeks ago. Considering the murky outlook and generally flat trading month, we do tend to feel some upward-nudging sentiment. Overall strong Q4 earnings and a healthy U.S. economy based on recent monthly reports is helping keep these mid-winter “animal spirits” alight.
Retail Sales Much Weaker in January
Speaking of a steep drop,
U.S. Retail Sales last month fell -0.9%, the deepest fall in a year, and worse than the -0.2% estimate. This is especially noteworthy with the previous month (December, so seasonally strong with holiday shopping) being upwardly revised to +0.7%. This morning’s numbers are advanced, however, therefore subject to future revisions.
Subtracting big-ticket automobile sales, we still swing to a negative: -0.4% versus expectations for +0.3%. The previous month’s upward revision was also to +0,7% from +0.4% originally posted. Ex-autos and gas, we see -0.5%, again the weakest print since January of last year. The Control number, also expected to come in positive for the month, reached only -0.8%. This is the weakest read since March of 2023.
Imports In-Line, Exports Spike Higher
As expected, this morning’s
January Import Prices came in at +0.3% from an upwardly revised +0.2% the prior month. Ex-fuel prices, this dips a tad to +0.1% — also just as expected. Year over year, Imports came down to +1.9% from +2.2% anticipated.
Exports, on the other hand, jumped up to +1.3% month over month — 100 basis points (bps) above the +0.3% consensus, and the highest print in more than two and a half years. Year over year, Exports nearly doubled expectations: +2.7% from +1.4%, and the loftiest figure we’ve seen here since the end of 2022.
We may point to the saber-rattling over tariffs as hastening export activity last month. There is a likelihood some of this has been pulled forward, so we won’t adjust our brackets regarding global trade until at least some of the tariff dust settles first.
Productivity Prints for January Surpass Estimates
Finally,
Industrial Production for January came in at +0.5%, 20 bps higher than estimates for +0.3%, and well down from the previous month’s upwardly revised +1.0%.
Capacity Utilization, released in tandem with Industrial Production numbers, reached 77.8%, slightly ahead of the 77.7% consensus. This was also slightly up from the downwardly revised 77.5% the prior month.
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Will Stock Market "Animal Spirits" Continue Thru Valentine's Day?
Friday, February 14, 2025
Pre-market futures are Valentine red this morning, but despite a mid-week drop, may still possibly finish the week in the green (all but the small-cap Russell 2000, that is). We see plenty of economic data hitting the tape at this hour, but none of it seems to be moving index levels. The Dow is -100 points at this hour, the S&P 500 is -5 and the Nasdaq -17 points. The Russell is actually +2 points currently.
The Dow has closed four of its past five sessions in positive territory, while the S&P is only a couple dozen points below all-time highs three weeks ago. Considering the murky outlook and generally flat trading month, we do tend to feel some upward-nudging sentiment. Overall strong Q4 earnings and a healthy U.S. economy based on recent monthly reports is helping keep these mid-winter “animal spirits” alight.
Retail Sales Much Weaker in January
Speaking of a steep drop, U.S. Retail Sales last month fell -0.9%, the deepest fall in a year, and worse than the -0.2% estimate. This is especially noteworthy with the previous month (December, so seasonally strong with holiday shopping) being upwardly revised to +0.7%. This morning’s numbers are advanced, however, therefore subject to future revisions.
Subtracting big-ticket automobile sales, we still swing to a negative: -0.4% versus expectations for +0.3%. The previous month’s upward revision was also to +0,7% from +0.4% originally posted. Ex-autos and gas, we see -0.5%, again the weakest print since January of last year. The Control number, also expected to come in positive for the month, reached only -0.8%. This is the weakest read since March of 2023.
Imports In-Line, Exports Spike Higher
As expected, this morning’s January Import Prices came in at +0.3% from an upwardly revised +0.2% the prior month. Ex-fuel prices, this dips a tad to +0.1% — also just as expected. Year over year, Imports came down to +1.9% from +2.2% anticipated.
Exports, on the other hand, jumped up to +1.3% month over month — 100 basis points (bps) above the +0.3% consensus, and the highest print in more than two and a half years. Year over year, Exports nearly doubled expectations: +2.7% from +1.4%, and the loftiest figure we’ve seen here since the end of 2022.
We may point to the saber-rattling over tariffs as hastening export activity last month. There is a likelihood some of this has been pulled forward, so we won’t adjust our brackets regarding global trade until at least some of the tariff dust settles first.
Productivity Prints for January Surpass Estimates
Finally, Industrial Production for January came in at +0.5%, 20 bps higher than estimates for +0.3%, and well down from the previous month’s upwardly revised +1.0%. Capacity Utilization, released in tandem with Industrial Production numbers, reached 77.8%, slightly ahead of the 77.7% consensus. This was also slightly up from the downwardly revised 77.5% the prior month.
Questions or comments about this article and/or author? Click here>>