Thursday, March 12, 2009

Retail sales skewed by gas prices again...

If you just flip through the headlines today you'll see drivel, like "Consumers respond to discounting and keep buying!!", "Retail sales hold", blah, blah.

Last month, you'll remember that I took issue with the "spike" in January sales because it was all driven by higher gas prices. Well, apparently no one took notice because the same thing happened in February and it was little noticed again.

"People are responding to discounting” as companies seek to get rid of surplus inventory, Roger Kubarych, chief U.S. economist at UniCredit Global Research in New York."

No, No, No......it's just not true...

"A jump in receipts at service stations as gasoline prices rebounded led gainers. Filling station sales climbed 3.4 percent. The average cost of regular gasoline rose 14 cents to $1.92 a gallon in February from January, and is holding near that level so far this month, according to AAA.

Excluding gas, retail sales decreased 0.4 percent."

So, the estimate for the month was that retail sales would fall 0.5% and ex-gas, that is about what happened, but don't let the facts get in your way.

Markets continue to soar because GE's rating reduction wasn't as bad as expected. The expectation for a bear market rally could be 10-20% (maybe even more) over 2-3 months. We've rallied 10% in 3 days. We'll see if reality begins to sink in by Friday.

Cheers!

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