Retail Sales Improve In January

Retail Sales Improve - Stocks Rebound On Monday

It’s not a surprise stocks rebounded sharply on Monday because they had fallen 5 days in a row. Stocks are constantly reacting to previous overreactions. Dow even rallied 0.79% despite Boeing’s 5.33% decline. This occurred because its 737 MAX 8 plane crashed in Ethiopia killing 157 people. 

Apple was a big winner as it rallied 3.46%. Possibly due to the hype surrounding its March 25th event where it will be unveiling services related to streaming video and news. Apple TV has been rumored for years. It will be interesting to see the new services. To be clear, I’m referring to a streaming platform like YouTube TV, not the Apple TV hardware device.

S&P 500 was up 1.47%, Nasdaq was up 2.02%, and Russell 2000 increased 1.77%. I’m used to seeing more volatility to the downside than the upside. This time we had a few moderate declines and a big swing upward which brought back most of the gains. 

VIX fell 10.72% to 14.33. CNN fear and greed index increased 4 points to 59 which once again signals greed. It spent one day in neutral. This is the opposite of Q4 when it could never get out of the fear category.

Every sector was up as this was a broad-based rally. Best 2 sectors were technology and communication services which increased 2.17% and 1.86%. 

Big tech names were in the news because presidential candidate Elizabeth Warren wants to break them up. If she gains in the polls, their stocks will fall. However, she’s currently at 7% in the RealClearPolitics average of polling which is 4th place. That’s why they didn’t react to her proposal.

Retail Sales Improve - Bloomberg Consumer Comfort Closes In On A New Cycle High

As you can see from the chart below, the Bloomberg consumer comfort index increased from 61 to 62.1 which is very close to the October high. 

It’s not a surprise consumer comfort is improving because the stock market is highly correlated with confidence. With confidence improving, we might see retail sales improve. I will review the January retail sales report later, but right now I’m referring to how strong March’s sales might be. 

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