Stock Market Update

Industrial production rose 0.5% in January (Briefing.com consensus 0.3%) and capacity utilization rose to 77.8% in January (Briefing.com consensus 77.7%). 

Retail sales declined 0.9% month-over-month in January (Briefing.com consensus 0.0%) following an upwardly revised 0.7% increase (from 0.4%) in December. Excluding autos, retail sales declined 0.4% month-over-month (Briefing.com consensus 0.3%) following an upwardly revised 0.7% increase (from 0.4%) in December.

The key takeaway from the report is that there was a notable pullback in spending on goods, something that can be attributed in part to abnormal weather. The full picture, however, points to a tired consumer after the holidays, raising the question as to whether that fatigue will persist because of inflation pressures or prove to be short-lived.

Import prices rose 0.3% month-over-month in January and were up 1.9% year-over-year, versus down 1.3% for the 12 months ending January 2024. Excluding fuel, import prices were up 0.1% and were up 1.8% year-over-year, versus down 0.3% for the 12 months ending January 2024.

Export prices increased 1.3% month-over-month in January and were up 2.7% year-over-year, versus down 2.4% for the 12 months ending January 2024. Excluding agricultural products, export prices jumped 1.5% month-over-month and were up 2.9% year-over-year, versus down 1.5% for the 12 months ending January 2024.

The key takeaway from the report is the recognition that there was inflation, as opposed to disinflation, across the report.

Treasury yields dropped in response. The 10-yr yield moved to 4.47% from 4.53% after the 8:30 ET data release.

Equity futures are little changed. The S&P 500 futures are down two points and are trading 0.1% below fair value, the Nasdaq 100 futures are down ten points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 48 points and are trading 0.1% below fair value.