First Wholesale Sales Decline Since March 2009 Sufficient To Send Stocks Higher
This it the kind of bad news that is now sufficient and necessary to send stocks higher: wholesale sales have plunged from a revised 0.9% to -0.3%, missing the consensus 0.5% by about a mile, and the first decline since March 2009. Yet wholesale inventories were in line, coming in at 0.5%, compared to expectations of 0.4%, even as the prior month was revised to 0.2% from 0.4%, thus washing the two month benefit as well. In sales, the biggest hit was felt by lumber which went from +8.6% to -8.7%, automotive from 1.8% to 0.6%, computers dropped from 3.5% to 1.8%, electrical goods from 3.1% to 0.6%, and hardware from 3.1% to 1.0% And as we see huge mutual fund outflows, stocks rip on this latest batch of bad news. After all QE 2.0 is now getting priced in and the cost of cash will soon be negative all over again.