Well, that lasted a day.
Not the rally, that seems OK at the moment but the Israel-Hamas Ceasefire Agreement is less than 24 hours old and already Israel is refusing to vote on it as Hamas balked on portions of the agreement and Israel signaled their disappointment by launching airstrikes that killed over 70 more people in Gaza, injuring hundreds more.
At least earnings season is off to a good start with JPM up 33% from last year, GS up 43%, C up 50%, WFC up 50% and today we hear from BAC, MS and USB. Actually, BAC made 0.82 vs 0.70 last year, FHN 0.43 vs 0.32, MTB $3.86 from 2.74, PNC $3.77 from $3.16, USB $1.07 vs 0.99 and MS $2.22 vs $1.13 (huge!) and UNH made $6.81 per share from $5.83 last year – than you for your contributions – but it’s still not enough to justify their 34x 2024 earnings and down they go!
We were so excited about bank earnings, we couldn’t wait and we picked up OZK yesterday as a Top Trade Alert for our Members, ahead of their earnings this evening. Tomorrow morning, we close our first earnings week of 2025 with CFG, FAST, HBAN, SLB, STT, TFC and WBS. Very few misses this week – we’re off to a great start!
Despite all the good news, the S&P 500 is still struggling to get back to 6,000 – failing right at the 50-day moving average at yesterday’s close. Failing it for the week is going to make the 50 dma look like serious resistance and that can lead more people to decide to sell so we’re going to need some seriously good reports next week, which is shortened by Monday’s holiday (MLK).
This morning we’ll see how Retail Sales ended up in December but they were already up 0.7% in November and that is going to be hard to beat. Auto Parts were up 2.6% in November so the ex-Auto figure was up just 0.2% and I’m not sure Auto Parts are the best stocking stuffers (but I guess they are perfect for Thanksgiving?). Another very important note is that Retail Sales are up in PRICE – NOT Volume…
8:30 Update: December Retail Sales are in at 0.4%, so that’s a big miss – especially as November has been revised up to 0.8% so a 50% drop into Christmas is NOT GOOD! Ex-Auto it’s still 0.4% so I guess I was right about Auto Parts not making good Christmas gifts. Overall, Retail Sales are up 3.9% for the year but, as I noted above – it’s all inflation.
Gas Stations lost 2.8% to hybrids, electric cars and plain-old better mileage new cars, Department Store Sales fell 1.3% and Building Materials dropped 0.8% but that will reverse in 2025 thanks to LA’s fires. Excluding Autos – Retail Sales in 2024 were up 2.9% and that is LESS than Inflation – there is some serious weakness in these numbers.
Bright spots were Non-Store Retailers (online) up 8.2% and Food and Drink – up 4.6% for the year. Clothing was up 2.6%, Health Care up 2.9% and, by the way, we’re talking $8,544,433,000,000 spent by US Consumers last year – that is more than DOUBLE the ENTIRE GDP of any other COUNTRY on Earth except China.
Now, here’s some perspective for you – TOTAL US Income is $17Tn and that SOUNDS great but 52.6% of that money ($8.9Bn) goes to the Top 10% leaving just $8Bn for the bottom 90% so, since Top 10%’ers don’t spend 10x more than their peers on consumables, you can see how the bottom 90% of this country is spending every cent they have – with nothing left over for retirement – just something to think about when they come bearing torches…
$1,000 a month for transportation? My first car cost $800! Not sure where those $2,120/month family homes are and $504 for groceries – Jeff Bezos laughs. My avocados were $1.79 each and the oranges were more – and I live in Florida. Why are avocados priced each and oranges priced per pound and why are there no scales if you are pricing things in pounds Mr Bezos?
There was however a 50% off sale on pre-cut fruit – so, saving $3 on that purchase I left Whole Foods in a good mood and THAT is why Consumer Psychology is so useful!
That’s not a joke, alternative apps like RedNote and Lemon8 are also Chinese companies and, in fact, Lemon8 is owned by ByteDance, Tik Tok’s parent company. RedNote is literally an official App of the Chinese Communist Party and your kids are signing a loyalty pledge when they download that one and click “I agree“. See – I told you you should read those things!
Although, given the choice between China re-educating my children or Elon Musk doing it – Wǒmen yìqǐ xuéxí zhōngwén ba (我们一起学习中文吧). and, speaking of our new Masters, don’t forget China is closed from Jan 29th for 15 days as we celebrate the Year of the Snake – a time of “change, renewal and rebirth” – a bit on the nose as Orange Jesus is resurrected, don’t you think?
