Tuesday, December 14, 2010

Retail sales slightly ahead of expectations - ignore that Best Buy news...

Remember all of the videos of people climbing all over one another to get their $499 flat screens at Best Buy on Black Friday? Oh, well apparently that's all they are buying because Best Buy's results were dismal. The question for everyone will be is this a one off miss - is Best Buy getting dinged by Walmart, Costco, Sam's, Target - or are people reigning in spending?

According to the Commerce Department retail sales were slightly ahead of expectations and that seems to have offset the negative Best Buy news. However, my back of the envelope calculation seems to show that at least half of the gain in retail sales came from gas stations. Hmm, do we think people bought 8% more gas last month or did something happen with gas prices in the last month? Oh, that's right, prices went up $0.50 in the last month. So, if half of the jump of retail sales was due to higher gas sales that was driven by higher prices. All is well with the world, go treat yourself to a new iPad as a reward :)

The Congressional vote on the tax break extension/Stimulus 3.0 will be watched closely today and could lead to another pop in the markets.


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