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Market Commentary: By The Numbers

August 13, 2008 – 12:00 pm

 Retail sales for July were up, but only .1%. Auto sales apparently were the biggest problem. Without autos the retail sales number would be up .4%. They revised last month upward from a growth of .1% to .3%. The only conclusion you can draw from this information is the consumer is spending less. The benefit from those one time tax rebate checks is over. 

Also, out this morning were inventory numbers which grew at a modest level but were up from the month before. The trick will be whether or not that inventory will be sold in the back to school rush and end of year Christmas season. The retailers are keeping tight control on inventory, building it very slowly for this time of year. 

Oil fell yesterday and is up this morning. The market is struggling to move forward. We will have to see further weakness in oil (which is likely) for this market to continue its summer rally. 

At some point falling oil will no longer spur the market. It will have to see something else that will spark growth in the future. That means a slowing of the housing debacle which is still not over. We might be seeing some signs that the banks are finally taking steps to dump foreclosed homes at prices that are very attractive. Buyers are starting to be teased into the housing market. Still, there is a long way to go. 

Good Trading
Steve Peasley
 

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