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Snow In The Summer? Card Data Shows Unexpected, "Disappointing" Drop In June Retail Spending
Even as volatility around the globe has soared in many cases to record levels (see China), one of the reasons why the S&P has desperately defended the 200 DMA with US stocks vol barely budging from multi year lows is that pundits, for some inexplicable reason project that Q2 earnings season will be good. It won't be.
But even if one presumes that non-GAAP EPS fail to pull an Alcoa and add back hundreds of billions in restructuring charges to the "earnings" bottom line, there is one last wild card: the US economy is doing well, the same pundits say, pushed forward by the resilient US consumer. There is a problem with that too.
After staging another dramatic slump early in the year, which was once again blamed on snow to offset what was supposed to have been an "unambiguously good" for US spending gas price slump, retail sales finally picked up in May, laying out hope that the June print and onward, would be "good enough" to suggest that the US economy is recovering, some 6 years after the "recession ended" mind you, and is on track for a Fed rate hike.
Unfortunately that ointment just got its own particular fly when moments ago Bank of America's internal card data revealed that after rising for 3 consecutive months, retail spending ex autos just posted its first monthly drop, declining -0.1% from May.
Based on BAC internal data, which tracks aggregate spending on credit and debit cards, retail sales ex-autos declined 0.1% mom in June on a seasonally adjusted basis. This follows a strong 0.8% gain in May.
Obviously since the data did not conform to the traditional narrative, BofA promptly had to "ask if there is anything unusual in the data that may affect the monthly figures." And since BofA can not blame snow in the summer, it said that "one possibility is spending may have been held back by the extended school year. Due to school closings during the winter, some districts extended the school year, thereby postponing summer vacations."
There is also the far more likely possibility that the US consumer - that 70% of marginal source of US GDP - is, despite all the propaganda, actually barely holding on. We give credit to BofA for at least considering this option:
"It is hard to prove if such a distortion exists. Therefore, we are left to conclude that the BAC internal data painted a disappointing picture of the consumer in June, especially considering our forecast for a stronger consumer in the second half of the year."
And while one can ignore BofA's commentary, it is worth noting that its spending card data is a very good immediate leading indicator to what official US seasonally adjusted retail sales due in a few days reveals, a number which Janet Yellen almost certainly already has ahead of her speech on the US economy in Cleveland today at 12:30 pm. A speech which will have a far greater impact on the US market than this week's backward looking FOMC minutes as it reveals the Fed's current thinking. Which, for all intents and purposes, surely means that the first rate hike, first due last month, has now been pushed back to 2016... or rather we should say "indefinitely."
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FUBAR-NOMICS TM
Unexpected seasonal adjusted affect of global climate change. Please to wait while Boris is feign expression of shock and surprise.
It's too hot right?
It's cause I shop at Goodwill and drive a 1986 Toyota 4x4. Not that I am broke, but I like keeping what I worked for...family income is in the top 5% and I stopped playing this game 7 years ago.
It's the decline in oil prices cause by elektric cars that can't go more then 3 miles a charge, so no friviloius shopping for you, peasanty. Shelter in place. A spork in evey empty pot. Stop that child from crying!
1981 diesel VW pickup. 50 mpg. Spews black smoke like mad. Goes forever...
Although I didn't buy it new and I drive my 13 mpg SUV when I need the weather to change (so says Algore).
Haha, I shove mine into neutral, turn off the key and coast....dump the clutch at about 35-40mph and off I go again. Fuckers honk behind me and I just flip them the bird and get by with it, cause there ain't a mofo out there that will mess with aguy in a beat up 1986 tankota...pussies.
This is my world bitchez.
VW Diesel pickup .... memories ... my son had one of these and he is a charter member cheapskate. But alas they do not run forever.
I thought it was because of all the software updates like NYSE? Just think, if it takes 3.5 hours glitch for NYSE, the most reliable system in the finanical markets, it will take at least 7 hours for every PC, laptops, moblie phones around the country to do the software updates. So 7 hours times god knows how many millions of devices... all the hour lost waiting, slowing down all the economic activities. Go ahead yellen, you have my permission to use that for your next FOMC meeting. :)
Just looked out the window....total whiteout.
It looks damn cold out there!
I can't see anything past 200 yards cause there's a complete green out now
And too much dangerous radiation from that blinding light thing in the sky.
Then there's these flying critters making noises and other tiny flying critters that bite!
And it's way too smelly of organic materials that must be harmful to breath.
I'm afraid this is serious. Looks like Americans have passed the tipping point and are now too fat to make it from their cars into their scooters to shop. Look for soft sales for the rest of the year.
Been near a Wally World lately? It looks like the opening lap of a NASCAR electric medical scooter race fighting for pole position. I needed some transmission fluid but got so disgusted I put it back and went to a tractor supply.
My grandfather told me that if you live long enough you will look around and will not even recognize the place. He was right.
I almost hate saying this but I didn't realize just how obese people are until I saw three horribly fat young women in a gas station Dunking Donuts store
One was working behind the counter literally had a spare tire around her and the other two waiting in line were well over 250 lb each bulging out all over
How can young women like that could let themselves become so fat?
The final straw for me to leave was this little tattooed and pierced punk was walking aroung with no underwear with his pants hanging down unbuttoned. I lost it and sad. Look you little worm, button up your pants, I don't want to look at you dick: and I'm sure this young lady does'nt either. Then the cashier and all the people in the store started looking at me like I was the asshole.
A plus of living up north...too cold for that shit at least half the year.
Time for another seasonal mis-judgement
Rebel flags sold out
Sold out...or banned?
It's been very cloudy this summer.
Oh, and half the country is unemployed (I include Wal*Mart greeters and folks holding similar "jobs" as unemployed).
More accurate metric is not number of employ citizenry, but is measure of sag in Wal*Mart scooter chassis. Remember hope is find in job create or destroy and increase of chocolate ration from 5g per day to 20g per week. War in Eurasia is rage on.
Move to Amerika commrade. Chocolate ration is 5kg per day!
That's what I like about the reports. The numbers are always pumped as great somehow, even when the numbers are "disappointing". WTF? Standard way to handle it has become: spin it somehow as good now, adjust numbers to reality later. After all, that was yesterday, right? Today we feel good again!
Too much rain or a drought. Any excuse that will pacify the sheeple.
The government shouldn't have closed those Walmart stores for (Jade) plumbing problems.
It's all good...plus it is Fantastic Friday ...green shoots everywhere! /sarc
moar layoffs can totally fix this /s
moar, actually, can fix this
oh, also - BULLISH!
Ford Moving Focus and CMax Production to Mexico
http://www.freep.com/story/money/cars/ford/2015/07/09/ford-focus-uaw-con...
Exactly. We need millions of new uneducated migrants from Central America, the Middle East, and China to replace the high skilled IT workers who run our defense industry and infrastructure. Imagine the profits replacing 100,000 Americans who make $100K a year w/full benefits with some Spanish only speaking Hondouran immigrant with a 2nd grade eductation for $7.25/hr! I know that's why I'm voting for a 3rd Bush! (2 just wasn't enough....)
Hillary will follow the same path - it was her husband who signed NAFTA.
Actually, there was snow recently. On a mountain top in CA.
Gee, it looks like we're running out of future to consume.
Really, guys, the weather excuse is soooo 2014. How about these:
"My dog ate my economic forecast."
"The sun was in my eyes."
"...spending may have been held back by the extended school year. Due to school closings during the winter, some districts extended the school year, thereby postponing summer vacations."
Unbelievable!
Ya can't make this shit up!
I thought the clean-up and construction spending after the Baltimore riots would increase spending!?! My bad! :-)