Stock Market Update

The stock market is on track for a modestly lower opening amid a busy morning of economic data and earnings reports. 

Total retail sales increased 0.6% month-over-month in November (Briefing.com consensus: 0.4%) following a downwardly revised 0.1% decline (from 0.0%) in October. Excluding autos, retail sales increased 0.5% (Briefing.com consensus: 0.3%) following a downwardly revised 0.2% increase (from 0.4%) in October.

The key takeaway from the report is that retail sales rebounded smartly in November after the end of the government shutdown, driven by increases across most discretionary spending categories.

The Producer Price Index for final demand increased 0.2% month-over-month in November (Briefing.com consensus: 0.2%) following a downwardly revised 0.1% increase (from 0.3%) in October. The Index for final demand, excluding food and energy, was unchanged (Briefing.com consensus: 0.2%) following an upwardly revised 0.3% increase (from 0.1%) in October.

The key takeaway from the report is that PPI and core-PPI both increased on a year-over-year basis to 3.0% from 2.8% and 2.9%, respectively, which is to say they moved in the wrong direction to create a true sense of inflation calm and a seeming rate-cut guarantee.